Accept Software Resource Library
Q & A from Growing Profits Through Innovation Webinar with Greg Cohen
If you attended our webinar on Wednesday, October 27, 2010, you heard Greg Cohen, Senior Principle, 280 Group talk about driving profitable growth through innovation.
In addition to speaking to your customers, he recommended six other research techniques that can lead to insights that will let you develop products that create significantly more value for the customer and ultimately help you create a lasting competitive advantage in the marketplace.
I highly recommend viewing this webinar especially in the light of today's post-recession economy where customers want to see verifiable value from the products and services they buy. In other words, they expect solutions that demonstrably lower costs, improve efficiencies or increase revenues. This means you need to deliver products and services they are willing to pay for.
Greg shares his insights on how to do it in an actionable, easy to understand style.
It was a very well-attended session with a lot of questions from the audience. Unfortunately, as we ran out of time, here are his responses to the questions we couldn't cover. Hope you find the insights valuable.
Looking forward to seeing you again in one of our future webinars.
- How do you recommend a company start the innovation process for a market the company is not experienced in but is willing to spend money to get into?
I am assuming you have some hypothesis around the customer pain and how your company is well positioned to solve it. In that case, you need to engage in a serious 3 – 6 month research project moving from the discovery VOC methods (ethnography and onsite interviews) to telephone interviews, and finally surveys to understand and quantify the problems in that space. In the later stages will want to concept test your proposed solution. There are research companies that can assist you but you should commit to participating directly in the early interviews and a third or more of the other research. You should also seek out industry experts.
- What techniques best used with a Users Groups?
The research technique depends on your goal, but if this is an online user group and you've solicited features and want to have the group rank them , you might try the online “Buy a Feature Innovation Game” at http://innovationgames.com/online-games/.
- In your experience, does it become more difficult to be creative and innovative the more technically demanding the business is? For instance analytics development and database solutions...
Strictly thinking about product innovation, certainly I would have to rank design innovation easiest, applied research (engineering) as next challenging, and then basic research the most challenging. On an analytics application I worked on, we experienced huge design gains in how we presented the data (a direct result of understanding customer needs) and technical gains like performance improvements through switching to bitmap indexes. Creativity (thinking in novel ways) helps in all the situations. But the cross functional team should be made up of more technical individuals.
- How much time and resource needs to be spent on these activities, especially for start-ups?
These techniques don't have to consume a major amount of time or resources. But if you are attacking a defined problem with a defined solution (e.g. OXO Carrot Peeler), I would spend up to 10% of development budget and up to 5 months to fully understand and quantify the problem, concept test my solution, develop a solid market requirements document, and ensure I spend the other 90% of my budget correctly.
On the other hand, if you are trying to create an entirely new market where the problem and solution are both largely undefined, you need to iterate your product and get it into the hands of the customer very early to understand how they will use it. In this case, you want to keep your burn to minimum until you know you've created the right product and can repeatedly sell it. Steven Blank described this process well in his book “4 Steps to the Epiphany.”
- How to run this across the company without too much cost implication on the innovation process?
Getting cross-functional teams together to brainstorm and consider creative approaches for a couple of hours is really not that costly. Not some of the formal research to validate problems can get expensive. But you should be willing to spend 10% of your development budget on confirming you are addressing the right problem. You don't want to have invested 100% of your budget into developing a product to only find out you got it wrong.
- What do think about M&A as part of "driving growth through innovation" process ?
It's not an approach I've spent a lot of time considering, but I think many mature companies purchase more innovative start-ups for this reason. Further, companies like Cisco have made acquisition, in how a purchased company is integrated, a core competency. Acquisition is a process that Cisco has really developed.
- What if your company is a 'me too' company?
If you're company is a ‘me to' company and wants to compete with the strategy, you want to be a “fast follower.” In this case. process innovation is important to copy the market leaders quickly and at a lower R&D cost. It also helps to have some sort of advantage. I think Dell was a great early example of this. Their product (PC clones) was undifferentiated, but they innovated around process and business model. Dell implemented build to order, selling directly to the customer (cutting out the distributor), and focused on operational excellence (inventory controls) to keep costs down.
- Dot voting and "spend $100" can be effective. Do you typically use any rules to prevent those voting/spending to keep from "stuffing the ballot box"? Such as; only one dot rom a voter on any one idea (prevents someone from putting ALL their dots on one)?
I usually give people 3 – 5 dots based on the number of ideas being votes on and people in the room. But I have always allowed people to put all their dots on one idea, which means they think this one idea is the most important one to implement. If, however, you observe a ballot stuffing behavior, you might restrict them to one dot per idea or use the "spend $100" with small cross-functional groups so they moderates themselves.
- What tools have you used to capture innovation ideas (post capture sessions)?
It depends on how many requests you think you're going to get. And I would use the simplest method that works. On the simple side is people email ideas to ideas@. . .” You can also a web form that ties to your bug tacking system (make sure to tag them as ideas and not issues) or a PLC system like Accept 360. Make sure to actively solicit ideas from other groups and customers. A real interesting system is P&G's open innovation portal. They accept ideas from anyone and also post their needs on this site.
Outside of P&G's site which really broadens how ideas will come into the business, what's more important is what you do with them. I recommend a 4-step process.
Rough screen – is opportunity interesting, big enough, and fits with company's capabilities and mission? This is about 10 minutes per idea. If it is just a feature request, route it to the product manager for the product.
10K Foot Business Case – Does high level analysis look encouraging. What is the market problem? What are potential solutions? What is the rough market size? What are risks and what is my hypothesis that I need to validate to get comfort in further developing the idea. This might be 10 phone calls or a few customer visits to confirm some facts. I would try to limit this inquiry to about 5 hours (outside of any direct customer research activities).
5K Foot Business Case – At this point you are just adding detail to the business case while prioritizing important open questions, confirming hypothesis, developing rough forecasts, continuing to do research, and understanding the sensitivity of the business model. Expect to spend another 20 hours plus any primary end-user research needed to validate the market problem.
Market Requirements Document (MRD) – If the opportunity still looks good, you want to develop a full MRD. Expect to spend at least another 35 or more hours plus any additional primary end-user research you need to validate the market problem.