Innovation Teams Must Answer These Six Questions Before Launching A Product2 May, 2017 / Articles
In previous posts, I have defined innovation as the combination of creative ideas with sustainably profitable business models. While it is good that companies invest in R&D, there is also the need to find “the architecture of revenues” for all the breakthrough products we are working on. This means that innovation teams should spend time searching for the right business models for their breakthrough ideas. But what exactly are they searching for? To make it more concrete, it is helpful to think of searching as a process for answering a hierarchy of key business model questions. There are possibly more questions that others can think of, but below are six key questions that I have consistently found useful in guiding innovation teams along their innovation journey.
Question 1: Can It Be Done?
This question speaks to the technical risks in any project. Will we be able to create what ever breakthrough we are imagining? The seriousness of the risks depends on the nature and complexity of the product or service. A number software products do not present that much technical risk. In other words, they can be done. However, for other more ambitious projects such as driverless cars, electric cars, healthcare or pharmaceutical products, technical risk is a genuine concern. In other words, there is often still a lot of work to figure out whether the product can be done at all.
Question 2: Should It Be Done?
While resolving technical risks often falls neatly into most company’s R&D processes, there is still a tendency to ignore market risks. In other words, even if we solve for the technical risks, is there anybody in the real world who cares about the product? What problems are we solving and for which customer segment? Is there are a real customer need out there? It is often hard for innovators to accept that customers don’t really care how clever they are. Customer care about their own problems and aspirations. So in addition to answering whether something can be done, we should also answer the question of whether it should be done at all.
Question 3: How Should It Be Done?
Once we are certain that it can be done and it should be done, then we have to figure out the right solution to give to our customers. A lot of smart innovators fail at this stage. They have discovered a customer need that is facing a good market. They also have a great piece of technology that can solve the problem. However, when they start developing their product they do so without involving the customer. This often results in ‘clever products’ that nobody knows how to use. Even if the technology could have solved the customer’s problem, the way the product has been put together becomes the barrier to adoption. Sure, it can be done. But it is just as important to do it the right way.