Some best practice ideas for igniting your innovation.
The market is challenging and highly competitive. Every day companies are doing what they can to innovate: releasing new products to drive brand engagement and get more customers.
Globally, business executives said in 2018 that 40 percent of innovations over the previous five years have had a positive impact on their business’s bottom line, furthermore according to Mckinsey 84% of executives agree that innovation is important to growth strategy, yet only 6% are satisfied with innovation performance. So it’s clear that innovation is vital, but the biggest challenge remains ‘How do companies actually do it?’.
So how can companies bring innovation to life and quickly bring new products to market without spending money on the wrong bets? It’s a tricky business, but there are paths that have been tread before. In this article we’ll look at how innovation can be done, the benefits and drawbacks of various approaches, and finally what an ideal solution might look like.
Innovation starts with ideas
It all starts with an idea. Innovation is part of an evolving company, changing to market needs and environments, and keeping customers happy. There are plenty of ideas that come around and as the old adage goes “it’s 10% idea, 90% execution”. How do you know which idea will be the game changer you’re looking for? How much are you willing to risk to test the idea, and when do you call it quits?
The most important step once you have an idea is validation. The idea needs to be validated quickly as possible whilst keeping costs low and this needs to be done at the same time as gaining valuable insight into the market. You need to answer the question: do people need what we are building and will they buy what we’re selling? If the answer is no, the sooner you get that feedback the better.
Validation of an idea within a company can be a complicated affair, most companies are constrained with resources in some way. This could be the number of people available to do work or even the capability within your company. If you’re a small fashion brand for example, you might not have a team of developers and designers in the wings to bring that idea to life. On the other side, if you’ve got a team of data scientists ready and waiting, it doesn’t help much if you need a mobile application built. And then, of course there is the time element. How quickly do you want this tested, and what are you willing to trade to get it done?
There is light at the end of the tunnel though. Even with these considerations, the testing of ideas is entirely doable.
Focus on the outcomes
Before we dig into the “how”, let’s start with the end in mind — what are the outcomes you are looking for from the validation?
You want to minimise investment risk
There are far too many stories of companies betting large on an idea that doesn’t work out, and then land up in a bad financial position or worse — they are forced to close their doors. The risk should be tied to the reward too, and since the reward is often not that clearly understood risk should be minimised as much as possible.
You want to test with a real product
Innovation lives at the intersection between user desirability, technological feasibility and business viability. Wireframes and clickable prototypes have their place in the validation process, allowing you to test some ideas quickly, but you’ll want to get users testing the technology via an early version of the real product as early on in the process as you can.
You need real feedback from real users
When users are using a real version of your product, they’ll have real and meaningful feedback for you. This helps you quickly pivot or iterate on your product, ensuring you land in the right place when you move to market.
Clear path to production
Having an early version of your product is great, but assuming your tests all come out positive — how do you proceed? You need a clear, defined path to production to ensure that when your idea is validated you can quickly move and scale it to a broader audience.
How do we get there?
Now that we’ve defined what we want to do and where we want to go, the next question is how do we get there? There are several ways to do this, some better than others, that broadly fall into two categories: external and internal.
When looking at external options for getting a product validated you have two choices: to go with an agency, or to go with an independent contractor.
Agencies come with all the bells and whistles. The entire process is managed, a product manager is assigned and they assist with everything you need from day zero to day done. They help define scope, give regular feedback on the product cycle and often even give insight into the actual product from contacts or clients they have. Agencies can also get your product done fairly quickly and help you get to market in a timely manner.
However, all of this overhead comes at a cost. A prototype of your product that is good enough to validate your core idea might be out of your budget and tip the investment risk scales out of favour. Also, these projects are normally bespoke custom builds which results in the product taking some time to do, even if it is quicker than doing yourself.
On the other side, individual contractors can also assist with getting your idea validated. There is more risk associated with this choice, and more options to weigh up. Do you go for a cheaper contractor to save money, or do you go for someone more expensive in the hopes they’ll deliver a better product? With this option you also need to manage the project, set the scope, and give continual feedback to ensure everything is on track. The overhead placed on you might sufficiently offset the cost of going with an agency, but you become a big factor in any delays that might push the timeline out.
You can also choose to do the project internally, even by bringing in additional resources. When going this route, there are several points you need to consider:
- The project will all be managed internally, so time and attention will necessarily be taken away from other projects.
- You need to decide which projects are worth moving, and which are set in stone.
- As you fit this work in with existing projects, internal resources will need to be assigned in order to get it done.
- Are these resources going to be full time, and for how long? If your developers time isn’t fenced off effectively, they can be pulled on to other “more urgent” items.
There are a number of competing interests when it comes to a company’s focus which all need to be balanced. The risk you run when doing a new product validation as an internal project is that it doesn’t get the attention required (resources and skills required are scarce) and the timeline keeps slipping. All of these factors need to be taken into account when looking to do this internally. Often, as unfortunate as it sounds, going internal is not the way to get delivery done on a product fit for market validation.
Finally, we can talk about the ideal solution to this dilemma. All hope is not lost — the solution can often fit into either an external or internal workflow as long as some basic requirements are met.
First and foremost, there needs to be good value around the delivery. Does the cost justify the product in respect to the desired outcome, which includes time to market and company focus? The quicker you want a product done, the more it will cost. The actual monetary cost will vary depending on your options, and ancillary costs need to be taken into account too (developers moved off other projects, overhead of managing the project, and more). Once you have the total cost of ownership figure placed against the time to market you can make an informed decision.
However, the rate at which cost goes up with time to market can be reduced. This can be achieved by having project management tooling and workflows in place to support this type of work, and having technical tooling and frameworks to enable a quick implementation of the desired output. These can cover a majority of development, bringing your product to market validation in no time.
The issue of scope can also be addressed upfront. A short discovery phase can help ensure that your idea is actually what you want built, and can help prioritise different features. This can lead to several market validation prototypes, all building on one another in succession. This helps ensure that your product will land well with little investment risk.
Innovation is key to a company’s continued success, so which route are you going to take? Hopefully this article has shed some light on the benefits and drawbacks of different approaches, and helped sign post a way forward. If you enjoyed this article, read more about us on our website.