Accept Software Resource Library
Creating the Optimal Product Strategy (Part 1 of 5): The Innovation Framework
As promised, here is the first of five ingredients for your plan to transform product innovation activities into a core business process.
One of the toughest, yet most important steps you need to take is to get senior management and all product-related departments on the same page. It's tough because you'll need to align the objectives and metrics for product development with the company's overall business goals. And that will ruffle some feathers.
You begin by creating an integrated product innovation framework. The framework specifies the limits of what your product departments should and should not consider as investment candidates. And it helps cross-functional product teams target their work where it is the most beneficial (meaning, "profitable").
The elements of the framework are...
- Company goals: Set targets for revenue, market share, margins and brand value that will come from incremental and new-product activities.
- Key initiatives: Specify the product themes and solution spaces where innovation needs to occur. Determine how you will handle new technologies you uncover that do not fall within these boundaries (i.e., licensing).
- Market strategy: Define the target markets, partnerships, messaging, customer profiles, pricing, and sales and distribution channels you need to support your product activities.
- Product investment model: Establish budget requirements for all innovation activities. Measure the ROI and adjust the budget proportions as demand shifts between new and enhanced products.
- Voice of the customer: Define the strategies and methods for gathering, analyzing and incorporating customer ideas into the innovation pipeline.
- Capacity, value, risk: Map available resources to the highest value activities.
- Product portfolio: Define the process for how you will evaluate product and market opportunities and set priorities.
Once the integrated product innovation framework is in place, you'll have the foundation for making product decisions based on analytics and customer needs instead of internal competition and guesswork.