How Data Can Buy Time for Your Innovation Pipeline
Whether flush with cash or confidence, most organizations increase their innovation efforts during successful times. At this point, every leader should be incorporating innovation somewhere in her strategy. The real problem is not whether to innovate, it is what type (e.g., incremental, disruptive) of innovation to develop. To answer this question, leaders need to know how much time they have to work with, and many organizations suffer from innovation launches that are too late.
These challenges stem from a root cause known as the innovator’s dilemma. Leading organizations focus so much on incremental improvements that they overlook new opportunities and new competitors until it’s too late. While these organizations aspire to be revolutionary, the window of opportunity always seems to close too soon. Niche brands change the game while big brands are asleep at the wheel.
Observing the impact of brands like Netflix and Dollar Shave Club, many clients lately have been asking me, “When do you think my category will get disrupted?”
Observing the impact of brands like Netflix and Dollar Shave Club, many clients lately have been asking, “When do you think my category will get disrupted?” Predictive analytics can anticipate when market shifts will occur, defining the window of opportunity for a brand to create the right type of innovation. This critical insight suggests when a leadership brand is likely to be disrupted, allowing leaders to form strategic plans with the right mix of marketing and R&D activities.
Here’s how to evaluate your innovation efforts to ensure they are timed right for the market. Use this formula to alleviate the pressure of the innovator’s dilemma:
Innovation Timing = Time Until Disruption - Development Lead Time
To properly time innovation efforts, a leader should follow this process:
- Identify how much time is left until your brand or category is disrupted. There are a variety of ways to create this forecast, ranging from intuitive to measurable. Regardless of the approach, the important part is that key stakeholders are all aligned to the method and results.
- Understand the time it will take to develop innovation in the pipeline. Incremental innovations should be relatively quick-turn, while revolutionary ideas may need deeper research. Most organizations have a fairly good sense for their own lead times, so this shouldn’t be a big issue.
- Compare the development lead times with when they will potentially be disrupted. If the organization’s innovation efforts are projected to launch before the disruption target, then the strategy is well-timed. If lead times are projected beyond the disruption, then the organization needs to re-evaluate its strategy.
An Example: Clarisonic
Clarisonic is a beauty brand that is fending off competition from all sides. As skin care’s first sonic-cleansing brush, Clarisonic took quick command of this niche ahead of major players. But after 10+ years it has become the clear incumbent, and a range of competitors have crept into its territory. Although the brand is still strong, it is struggling to maintain mindshare with so many new devices.
In order to maintain its position as THE beauty-device brand, data on Clarisonic could define the threat and reveal the window of opportunity. Twitter conversation about Clarisonic peaked in 2013, and then began a slow and steady decline. At the same time, conversations about “cleansing brushes” saw a notable increase in 2015. This suggests Clarisonic had a 2-year window between their brand’s peak and when competition from other cleansing brushes started to take hold. (In reality, most brands don’t recognize their problems immediately, but with the right monitoring systems in place it can be easy to keep tabs on competition and understand how to adjust strategy.)
Clarisonic has developed a variety of new devices over the past few years, launching within their window of opportunity to stay competitive. These include adjacent innovations into cosmetics as well as more revolutionary ones like a new skin-firming device. Although they continue to lose mindshare with so many competitors fighting for attention, they maintain a high volume of conversation when it comes to beauty devices. The brand currently ranks #3 in mentions within this the cleansing brush conversation.
Clarisonic still leads the beauty device category, but few organizations can consider themselves so lucky. In order to time your innovation successfully, consider these steps:
1. Monitor your brand equity using always-on tools and technology. Gone are the days of quarterly surveys. You can do much better by scanning the authentic conversations occurring online across a variety of platforms. By monitoring brand awareness and relevance, you’ll know if and when your brand’s equity shifts significantly.
2. Monitor category trends. In the case of Clarisonic, this meant tracking all the cleansing-brush conversations. Consumers started to talk less about their brand and more about alternatives. By monitoring category trends alongside brand equity, leaders can identify when they’re losing relevance or differentiation and plan strategies to adjust their position.
3. Don’t rely on promotions or one-off activations to maintain brand equity. These may lift sales for a given quarter but in my experience they rarely result in brand lift. Identify the kinds of ongoing activations that build a relationship with your consumers and keep the brand relevant.
4. Apply predictive models to anticipate category shifts and establish your window of opportunity for innovation. Establish alert systems that notify you if significant changes happen to your brand or category.
5. Review your innovation roadmap to ensure that the window of opportunity aligns with the lead times in your pipeline.
How does your organization track and measure innovation? Leave a comment and let’s start a conversation.
