Is Now the Time to Risk Product Innovation?

Sally Mills from Lavolta has just published her latest column in Nett Magazine. This month we were excited to provide an interview about the impacts of the depressed economic climate on product development and innovation.

SHOULD WE BE TAKING RISKS IN PRODUCT INNOVATION RIGHT NOW?
PRODUCT INNOVATION AND THE ART OF BRINGING IDEAS TO LIFE

It’s easy to batten down hatches until the financial storm passes but be careful in cutting back on creativity and innovation as you could end up with a defunct business. This month we cast our ‘trend lens’ on product innovation, the risks involved in bringing ideas to life and the art of good product management.
To get an industry perspective, we talked to Nick Coster, a founding Partner of brainmates, a product management consultancy, and not surprisingly there’s been a noticeable slow-down in innovation investment, particularly in the experimental stage of product development. “Prior to the economic crisis, companies were prepared to launch experimental products, successful or not, as failure is often considered an inevitable part of the innovation process and most organisations factor in an appropriate level of risk. Product Managers were put under a great deal of pressure to deliver solutions quickly to gain competitive advantage and first to market status. Launch dates were often rushed as the sooner the product was in the market they were more likely to make money, although sooner is not always better!”

Not surprisingly, these days, businesses are more adverse to risk but they still have to provide new customer solutions and Nick said “there has been a noticeable and healthy shift back to product investment. Companies are cautious and asking for more cost constrained effective models in relation to product innovation and they’re looking for ‘pay back’ with stronger commercial outcomes, and profitability and a reduction of wasted innovation investment.”

In these times, the focus is on identifying logical solutions to customer problems and needs rather than developing unnecessary products just to see if they will work or development. It’s not about building solutions to problems that aren’t there or for that matter, building a product and then trying to find a market for it. “A fun story that illustrates thisOne of my favorite stories,, although a myth, is the NASA’s “zero Zero Ggravity Ppen”. When NASA first started sending up astronauts they needed a pen that worked and quickly discovered ballpoint pens wouldn’t work in zero gravity. To combat the problem, NASA scientists spent billions millions were spent to develop a pen that writes in zero gravity, upside down, underwater, you name it. And The the Russians solved the same problem just by usinged a pencil! The morale of the story; product management is commonsense and logical, start with your customer needs and work backwards. And remember, innovation doesn’t necessarily mean creating new products, it’s about looking at your existing products and finding new usage and new markets.”

Bringing products to market, whether they’re brand new or re-modelled is crucial to top line growth and bottom line results but also presents risk to business. Typically, innovation adds a genuine value and is linked to higher performance but it also challenges the status quo and can have a negative or destructive effect as new developments change organisational practices and processes. There’s a risk of costly R&D that can erode profitability and shareholder return. There’s a risk in the time, effort and cost of commercialisation. And, there’s a huge risk in the successful up take of your product by consumers.

However, that said, it’s essential that we pioneer new ideas as business cannot grow through cost reduction and cut backs. The cross pollination of ideas are essential and it’s the art of the Product Manager that brings these ideas to life and ensures success.

Product management is a demanding discipline because there are so many disparate skills required, from high level strategy to the granular detail and that’s why they’re often likened to a mini CEO as they are ultimately responsible for the commercial outcomes and profitability of their product.

Product Managers are leaders, influencers and drivers. It is their responsibility to have an intimate knowledge of the features, benefits and capabilities of their product. They’re responsible for the end to end product lifecycle from conception to discontinuation and will understand the customer, market, industry, competitive landscape, regulatory and technological trends and best practices intimately.
It’s a tough gig being a Product Manager as they not only have to lead multi-disciplined teams and manage stakeholder expectations but they are often faced with making tough decisions particularly when trying to predict the future of a changing and uncertain world as there are often no right or wrong answers. Their job is to make intelligent decisions about product evolution, so it’s essential they demonstrate a logical and pragmatic approach to innovation and that’s why they are worth their weight in gold.

Thanks Sally!