HOW MY ENTERPRISING KIDS USED CUSTOMER-CENTRIC INNOVATION TO SOLVE A COMMON PROBLEM: HELPING KIDS GET ACTIVE
For the past three years both of my kids have been involved in FIRST – For Inspiration & Recognition of Science & Technology – a global organization with robotics programs for kids ages 4-15, aimed at introducing children to STEM careers through fun, hands-on learning coupled with real-world problem-solving.
In addition to building and coding a robot, each year teams are challenged with an innovation project. This year their team (called Howl ‘Bout It) focused on a customer problem they see all the time: motivating kids to get more physically active. Every year I am reminded of our client work at Vecteris and find myself blown away by the customer-centric innovation approach these kids take when finding and implementing solutions to the problems they wish to solve.
The approach they take is very similar to the one we use at Vecteris with our clients to help develop scalable, renewable products; we call it The Productize Pathway™. If you are not familiar with it, there are 6 phases in the Pathway:
The Howl ‘Bout It team was demonstrating skills in all of these areas but, in particular, there were 4 key places where they really shined:
1. Building a product-friendly culture
Creating a product-friendly culture was already embedded in the core values of the Howl ‘Bout It team; to be inclusive and innovative in making and sharing discoveries. This team started with a clear vision of where they wanted to go and kept returning to that vision to make decisions. They developed skill specialties across the team including coding, building, writing, and project management to name a few. Finally, all of their work was a collaborative team effort, driving the team’s ability to achieve success. And achieve success they did, going all the way to the FIRST World Invitational Competition.
Key Takeaway: Don’t neglect the team culture and how it impacts a team’s ability to effectively innovate.
2. Conducting research to better define the customer problem
The problem the team identified was a lack of motivation to exercise, particularly in kids ages 6-18. To better understand the problem and what motivates their target persona, they created surveys to learn more about the “voice of the customer”.
They found that kids most enjoy walking and running and are primarily motivated by friends. After brainstorming several potential solutions, the group selected a fitness scavenger hunt as the product that they would develop to address motivation and the lack of exercise. They named their product H.O.W.L., after their team name, HOWL ‘Bout It Outdoor Workout League.
Key Takeaway: Ground your ideas in real data on what your customer is experiencing and what will motivate them to change.
3. Designing and Developing an MVP to prove out their product
The H.O.W.L. fitness scavenger hunts would span parks across the city of Cincinnati. Kids would search for codes, and then scan and enter them online to receive points. Starting with an MVP to validate the proposed solution they found that 92% of the participants enjoyed the experience and would do it again, and 84% said it made them more active. Product revisions were made based on customer and partner feedback.
Key Takeaway: Test your ideas, as best you can, in real life to validate the concept and make it better.
4. Get Creative with your Launch Plan
With the MVP scavenger hunt a success, the team turned to their launch plan. Without the resources for a marketing budget they turned to local partners, such as Great Parks of Hamilton County to put their plan into action on a larger scale. They raised money through GoFundMe to develop a website and secure incentives for “top performers”. Upon product completion, H.O.W.L. workout scavenger hunt trails covered over 36 miles across 14 parks.
After the full product launch, the team continued to iterate and grow their product offering. They created a leaderboard and developed new challenges. They were fortunate to partner with the Cincinnati Reds, who have generously awarded Reds tickets to the top leaderboard winners each month as well as general participant ticket discounts.
Key Takeaway: If budgets are limited, explore how partners can help you reach a larger audience. Also, don’t stop at the MVP; be continually iterating to improve your product offering.
I hope this story of six enthusiastic kids and their “product” will inspire you to think about what new product best practices you can bring to your day-to-day work. If you aren’t quite sure where to start, take our Product Innovation Maturity Diagnostic to identify the best place to start and give us a call if you need help.
“People often believe that to do better work, they should do fewer things. Yet the evidence flies in the face of that assumption: Being prolific actually increases originality, because sheer volume increases your chances of finding novel solutions.”
- Adam Grant, Organizational Psychologist
We often think of breakthrough innovations as starting from a single idea spark. Think of that stereotypical image of the ‘aha’ moment with the lightbulb turning on above someone's head. In truth, according to Adam Grant at least, we need a lot of ideas to find ones worth pursuing. His theory is that a large quantity of diverse ideas will ultimately yield the highest-quality ones.
Here are three approaches to maximize idea generation:
Establish an Innovation SWAT Team
In order to create a collaborative space, I encourage organizations to assemble a volunteer team of junior employees to be champions for innovation, creativity, and applications of new technology. As an example, one company created a grassroots “Team Innovation” whose job was to:
This energetic group hosted outside speakers, took “field trips” to visit other companies, and managed the company’s innovation ideas process, whereby new ideas would be screened and selected for pilots.
Often, we need a long list of ideas, both good and bad, to find the next big breakthrough. That’s also where co-creation, one of the other tactics I talk about in my book, can help.
Use Co-Creation for Product Innovation and Design
The most successful companies take a co-creation approach both to design and to development. Co-creation is just as it sounds: creating a product innovation solution jointly with the customer. I love co-creation because it keeps the customer at the center of new product design and development.
LEGO has been a pioneer in the use of co-creation for product design. The company enlists the help of customers through the LEGO Ideas portal. It’s an online community where fans and LEGO creators come together to suggest, iterate, and evaluate ideas for new LEGO kits. Some pretty amazing products have come from the Ideas portal like Women of NASA, The Beatles’ Yellow Submarine, the DeLorean from Back to the Future, and the motel from Schitt’s Creek.
The process is simple. Customers can log in to the Ideas portal to submit an idea for a new kit. Then, the over 875,000 customers who are “members” of the Ideas portal vote on the kits they want to see come to life. It takes 10,000 votes for the idea to move forward. While that’s no easy feat, LEGO Ideas reduced the time to market for new LEGO kits from two years to six months. Every single kit developed from this approach has been a best seller with 90 percent selling out in their first release.
You can read more about co-creation, and one of my favorite approaches to it, in a blog I wrote last year on the topic.
Leverage Collaboration to Accelerate Innovation
UK-based Lloyds Banking Group is a good example of successful innovation based on involving multiple stakeholders. In 2006, Lloyds was struggling to keep up with fintech start-ups. Their processes were slow and innovation wasn’t happening at the speed needed. They created a digital services unit to begin their digital transformation. The unit is co-led by a senior IT executive and a senior business executive. This co-leadership helps to ensure that digital innovations are developed with both technology and operations in mind. “Not only does the unit deliver the technology solutions for the bank’s new digital retail banking initiatives, but it also ensures that business processes are adapted appropriately,” reports Capgemini Consulting. Today, Lloyds is the UK’s largest digital bank.
There is a theme across these three approaches, by generating lots of ideas and working collaboratively we identify the best ideas and avoid one of the most common mistakes that companies make in product innovation: designing in a vacuum. If you would like the read about other common mistakes companies make download out white paper on the Top 7 Product Innovation Mistakes to Avoid in 2021.
I don’t think I am alone in this, but 2019 feels like a lifetime ago. It was August of that year that we first introduced our Product Innovation Quotient, a tool to help organizations assess their product innovation capabilities. Since then, our thinking has evolved—and so has the assessment.
Today, we have a more robust assessment that is still simple to complete and understand—and digital. We’ve renamed it the Product Innovation Maturity Diagnostic. You can take the assessment on our website. We’ll send you the results via email once your scores are calculated by our team.
A Model for Product Innovation
Modern product innovation and management is an organization-wide competency – not a single person’s job.
With this in mind, we created an organization-wide model - what we call the Productize Pathway - for how to develop and bring products to market successfully. It encompasses activities from data analysis, market research, finance, product development, sales and marketing.
We've created the Vecteris Product Innovation Maturity Diagnostic to measure your competencies across the six phases of the Productize Pathway:
Few teams are strong across all phases of the Productize Pathway. Knowing ahead of time where you may need help (either in resources or in training) will help save you time and money allowing you to reach success faster.
We designed the Product Innovation Maturity Diagnostic to walk you through each stage, outline best practices and help you determine which areas you should focus on improving first.
Productize: The Ultimate Guide to Turning Professional Services into Scalable Products
When the world shut down a year ago, business began to slow for many professional services firms. For many, the slowdown created an opportunity – or urgent need – to try to productize their services as a strategy to grow scalably, improve valuations, and fend off new digital-first competitors.
Since I’ve seen many firms waste a lot of money unsuccessfully trying to productize, I used the slowdown to write a book explaining why. Admittedly, I did not fully appreciate the herculean task in front of me but fast forward a year and, amazingly, the book is finished—it is ready to publish in a few short weeks.
Why Productization Often Fails
My thesis is that firms often fail to successfully productize for two reasons. First, they tend to massively underestimate how difficult it is to add a product business model alongside a services business model. Second, they do not recognize how hard it is to develop successful new products, even in the best conditions (new product failure rates are estimated to be somewhere between 40-70%).
New product development and commercialization are often outside of their core skills, processes, and mindsets for companies that deliver highly customized services. Productizing services typically requires organizations to think differently about how they work and create value for their customers. This change does not come easily.
I wrote Productize: The Ultimate Guide to Turning Professional Services into Scalable Products to fill a gap in the marketplace for professional services organizations that want to innovate and develop more scalable—often tech-enabled—products. It is backed by over twenty years of experience building productized consulting, training, information services, and data services businesses.
Seven Deadly Productization Mistakes – and How to Avoid Them
The book first outlines the "Seven Deadly Productization Mistakes" made when pursuing a product strategy and then provides the blueprint for overcoming each of these missteps. It is designed to be a practical playbook for any professional services business leader who wants to accelerate growth successfully.
Productize includes real-life case studies and stories featuring professional services leaders who have successfully led their organizations to create more scalable services and products. It also includes more than two dozen tools and templates to help teams implement the tactics so they don't have to start from scratch.
In this book, readers will learn:
The book will be available now on Amazon.
I was explaining to a client the other day that the biggest mistake I see companies make when developing new products is developing a product that does not solve an urgent and expensive customer problem. Turns out he’d heard me say that before. Many times.
This time, though, he asked: “But, Eisha, what exactly is an urgent and expensive customer problem?”
I paused. I speak or write those words so frequently that I forgot other people aren’t as steeped in them as I am. It was an “aha” moment for me.
An urgent problem is a problem a customer needs to solve within this calendar year.
An expensive problem is a problem that a customer is willing to allocate resources (human and financial) towards solving.
Urgent = Customer needs to solve within this calendar year
Expensive = Customer would allocate resources towards solving the problem
Is It Urgent? Is it Expensive?
Here are a couple of scenarios to help illustrate the urgent and expensive customer problem concept. Ask yourself, is this scenario an example of an urgent problem? Is it an expensive problem?
Scenario 1: I need reporting data this week for a Board meeting. I need to get a data visualization tool or I could pull it manually and give it to them in Excel.
Answer: Urgent, not expensive. Excel is a perfectly good free alternative. It might be slow, but it works. Now, this could become expensive if every customer needed this multiple times a week but in this situation, this problem is not expensive.
Scenario 2: My CRM provider is really expensive and I’d like to switch, but our executive team is dragging their feet on making a decision.
Answer: Expensive, not urgent. This could become urgent if we needed to cut expenses to keep covering the cost, but for now, we have time.
Scenario 3: My company was just hit with a lawsuit and my in-house attorney just quit. I need outside counsel.
Answer: Both! Legal help is costly, but we need it now because we can’t ignore a lawsuit.
Hopefully, those scenarios were pretty straightforward. But, the real world isn’t always that black and white. There are several traps we can fall into when it comes to identifying urgent and expensive customer problems.
Beware of the Customer Problem Traps
If I’ve said “urgent and expensive customer problem” a million times, I’ve probably advised “talking directly to your customers” two million times. We are constantly encouraging our clients to go directly to their customers and prospects before spending significant development dollars. While collecting voice of the customer is incredibly important, there are a few traps to avoid when trying to uncover urgent and expensive customer problems.
1.Frequently cited problem: Sometimes a product team thinks they have identified an urgent and expensive customer problem, but it’s really only a frequently cited problem.
For example, my team recently completed a new product development project for a client whose business was placing professionals in out-of-town assignments. We started the project with a series of Voice of the Customer interviews. Many of the professionals we interviewed talked about the loneliness they felt while on out-of-town work assignments. In digging deeper we realized that the problem of loneliness was not as painful as other problems, such as job assignment uncertainty or access to better temporary housing options. Loneliness was a frequently cited problem, but not an urgent and expensive problem. We recommended to our client that they focus innovation efforts on solving the problems of job assignment uncertainty and better temporary housing options and think about addressing loneliness later.
2. Too Small to Be Profitable: Sometimes an organization identifies an urgent and expensive problem, but for a market segment that is too small, too price-sensitive, and/or not a good fit with their core services.
For example, one copywriting services company decided to use their existing internal writing training program for new employees and develop it into a new product that clients could buy to train their staff. Unfortunately, after spending more than $100,000 developing the new external-facing program they found that the only companies interested in the training were the small handful of very large companies who had teams of in-house copywriters to train. The Total Addressable Market (TAM) for this product was too small.
3. Problem of One but not Many: Other times, we mistake one customer’s request for the need of many customers.
For example, the customer of a training and development company asked for virtual delivery of the nine class training series to help reduce travel costs (this was pre-COVID-19). Without validating whether other clients had the same need, the company spent well into six figures building an online platform that only one company wanted.
Not starting with an urgent and expensive customer problem isn’t the only mistake we see in product innovation. Read our white paper on the Top 7 Product Innovation Mistakes to Avoid in 2021.
It is so much easier to innovate new products or services when we stop trying to be perfect.
This can be really hard for those of us who have perfectionist tendencies. If you are familiar with the Enneagram, which is a personality framework, I am a “One.” The One-type is literally named the “Perfectionist”. The upside is very high standards, commitment to improvement and strong internal drive. But it also has a strong downside.
For example, many organizations lose money on new product development or get lapped by competitors because they take too long getting a product to market. Worse, they invest too much time and money in a product with a poor market fit. These organizations often use long waterfall development processes with “stage gates” to advance to the next investment level. It can take many months, if not years, before they start receiving real market feedback on their ideas.
Successful product innovators adopt a more rapid, experimental approach to product development and develop a test-and-learn mindset in their new product teams. This approach comes from The Lean Startup by Eric Ries, which posits that iterative, agile techniques should replace traditional, linear waterfall development or R&D stage gates. Ries saw similarities between the more agile, iterative way of operating and the Toyota Production System, known as Lean Manufacturing. Hence the name “Lean Startup.”
Ries proposes that organizations adopt a MVP or Minimum Viable Product approach to product development. An MVP is defined as “the smallest experiment that either proves or disproves [our] assumptions about a business idea.” Ries calls it a “build, measure, learn loop.” Breaking that down we:
It allows us to test our products in real life with real buyers and users to validate their core value. The MVP is a version of our product (or product idea) with the right balance of features to satisfy early customers and provide learning. It contains the minimum number of cost-effective features to deploy while fundamentally allowing us to test our product and validate the product’s core value.
A real-life example of the MVP in action comes from Vecteris client, The Garage Group. The Garage Group is a consulting organization with decades of experience helping big companies innovate like startups. In 2020, they set a goal to use technology to scale their services to a broader audience.
Their MVP brought together their experience and their intellectual property into a five-module Entrepreneurial Learning Program. Since its launch in August of last year, they have worked through several “build, measure, learn” loops to better understand positioning, pricing, and packaging. By bringing an MVP to market faster, they got real, in-market feedback on the product’s need with a minimum investment. Now, they can quickly iterate for further development.
MVP tests like these are designed to prove or disprove a wide range of hypotheses about the product, such as technical feasibility, market demand, or pricing. (If you want to learn a little more about MVPs, you can check out our blog: What Kind of MVP is Right for You ).
The point is that our products do not have to be perfect to go to market. A Lean Startup approach is a new way of working for many of us. But the payoff can be huge. A recent survey of 170 executives who work in R&D, strategy, and new product development roles at large public companies found agreement on several benefits of taking a test-and-learn product development approach:
Many leaders and organizations struggle to adopt this approach because it means changing what we mean by “done.” It also requires building our capabilities to quickly collect, aggregate, interpret and apply customer feedback to the MVP (and future versions) to evolve our product as quickly as possible. Testing and learning at speed takes a lot of work. It takes highly specialized analytical skills and a deep understanding of smart product development. This is where many organizations benefit from outside help.
Find out what to look out for next when innovating new products and services in 2021. Read our white paper on the Top 7 Product Innovation Mistakes to Avoid in 2021.
Organizations that struggle with new product innovation typically don’t fail because their leader isn’t a visionary. It’s not that the team isn't creative or smart. It's because, as humans, we favor routine. Innovation takes most of us outside our comfort zones and often requires new skills and behavior change.
Before we start working with organizations on creating processes to support innovation, we encourage the leadership team to first examine their culture and skill sets to make sure that they have the people and environment to be successful. Or, what we call focusing on people before processes.
Here are the 7 things we recommend leaders do:
1. Start with a Strong, Well-Articulated Vision
The CEO and leadership team must first articulate a strong, clear vision for the innovation strategy. A great example of this comes from Jennifer McCollum of Linkage, Inc. Linkage is a leadership development consultancy that specializes in assessing, training, and coaching leaders. While the company had evolved over its 30-year history, it still relied on a people-intensive, highly customized services model. So, Jennifer began to develop a strategy of “productizing” its services to help the organization scale and grow.
Jennifer started by anchoring the organization around the ambitious vision of impacting leadership effectiveness and equity in 500 organizations by 2022. Setting this goal would require the organization to innovate and get out of the business of highly customized services. This very clear vision is memorable, measurable and is what is guiding the entire organization through a true transformation of its business model.
2. Plan for Behavior Change from the Top Down
While a strong vision is necessary, it is not enough. Leadership teams must also model innovation-friendly behavior. For example, the Linkage leadership team developed The Linkage Way, an outline of specific behaviors to help change company culture one behavior at a time.
Behaviors such as:
To help reinforce the behaviors, each week a member of the leadership team shared their experience witnessing or practicing one of the organizational behaviors. The Linkage Way is now rolling out company-wide. Employees from all divisions and at all levels share their experiences with The Linkage Way organizational behaviors on the internal chat board.
3. Hire and Develop the Right Skills
Organizations also need to acquire the right skills either through training and development or hiring. For example, bringing in new talent and also working with outside consultants and trainers to teach the rest of the team critical product innovation skills.
What do we mean by “product innovation” skills? These competencies include being able to:
We also recommend finding people who can work with uncertainty and doubt such as “Chaos Pilots,” a clever label for people who can “create structure within chaos and take action.”
4. Make Room for Diversity of Thought
Once organizations start to bring in new skills, we have to make sure that new hires don’t suffer “organ rejection” from the rest of the organization. When you commit to bringing in new skills, you also need to commit to welcoming and leveraging the diversity of experience and thought. We recommend investing in training leaders on how to practice inclusive behaviors including how to create “psychological safety” on teams. Read more about building an agile team in this Harvard Business Review article.
5. An Organizational Structure that Facilitates Collaboration and Agility
Even if organizations have brought in the right skills and are inclusively allowing these skills to flourish, functional silos can kill innovation. You can read more about this in The Silo Effect by Gillian Tett. Innovation tends to flourish in cross-functional teams because these teams have more diversity of perspective and can act more rapidly to develop and test product ideas.
6. Company-Wide Technical Acumen
For most organizations, “new product innovation” means using technology to create new products. As such, technical acumen, also known as digital fluency, is an incredibly important competency. Not just for our teams tasked with innovation but for the entire organization. Boston Consulting Group (BCG) describes the importance of digital fluency well: “If the growth in digital talent outpaces the ability of the rest of the workforce to keep up, the company as a whole will be left behind.”
7. A Test-and-Learn Mindset
Last, but definitely not least, organizations need to develop a test-and-learn mindset that is applied at every stage of the new product development process. Read more about this approach here.
A test-and-learn product design process is a new way of working for many of us. But the payoff can be significant. A recent survey of 170 executives who work in R&D, strategy, and new product development roles at large public companies found agreement on several benefits of taking a test-and-learn product design type of approach:
Consider asking for help
True innovation is hard but a necessity in a fast-changing environment. It requires getting outside of our comfort zones as well as new skills and behavior change. We are here to help.
Find out what to look out for next when designing tech-enabled services in 2021, read our white paper on the Top 7 Product Innovation Mistakes to Avoid in 2021.
A few years ago, I read the book Designing Your Life by Bill Burnett and Dave Evans. The book describes how to use design thinking innovation practices to help people proactively explore and change their lives to make them more meaningful. More fulfilling. More joyful.
At the time, I had a deep longing to do something entrepreneurial, yet impactful, and I also wanted to start thinking about how my life would change as my children grew and became more independent. I thought the Design Your Life approach could be helpful because design thinking, when done well, helps us overcome constraints. And I felt very constrained. Constrained by my own expectations of what 'success' looks like, constrained by my mortgage, constrained by family demands on time.
To overcome constraints, design thinking helps us think more creatively and to experiment before committing significant resources to an idea. By applying the same innovation practices that I now coach companies through, I was able to "innovate" my life by charting a path to co-found Vecteris, to become a certified yoga teacher, and to be much more deliberate in how how I spent my time with my family. I have evolved the process a bit, bringing in ideas from Ayse Birsel's book, Design the Life you Love, and Danielle LaPorte's book The Desire Map.
Since we are very nearly post-pandemic (I hope), I want to share the process I use in case you want to step back and reimagine what might be possible in your life, both professionally and personally. What do you long for? What do you want to keep in your life post pandemic? What do you want to shed?
This process is not rocket science, but it mirrors the tried and true innovation process that I use with business clients and it has been so helpful for me to realize dreams I thought impossible, ultimately creating more joy in my life.
Step 1. Define the Problem
“Life innovation” work starts by defining what is working in our lives (and what is not). I do this by keeping an energy journal (suggested by Burnett and Evans) for 1-2 weeks. The journal aims to identify the activities, people, and places that give us joy (and those that drain our energy).
My first energy journal that I completed in 2017 revealed that the time I spent teaching, writing, and coaching was incredibly satisfying. The time that I spent creating reports and other administrative tasks was, to be honest, soul-sucking. A huge “a-ha” was how rewarding I found the time I spent doing work that elevated and empowered other women – whether through mentoring or helping to organize a women’s employee resource group.
One of my friends, an executive at a large consumer goods company, kept an energy journal and she realized that the flower arranging class she was taking as a hobby brought her immense joy. Being able to make flower arrangements for her friends, take them to parties, and using them in her entertaining made her happier than she ever thought it would.
The energy journal is a great tool to uncover ways to innovate our lives to bring us more joy.
In addition to tracking the ups and downs of daily life, I also reflect on the quality of different areas of my life using a dashboard method. Ayse Birsel talks about it in her book, as do Bill Burnett and Dave Evans. Think of this as the same as scoring the different products in your product portfolio to help you determine where to focus improvement efforts.
It helps to think of it as a gas gauge on the dashboard of your car. Ask yourself, how full are you on all the different components that come together to create a well-lived life? How full are you on love? Relationships? Health? Spirituality? Financial? Career? Hobbies? In your physical environment?
The first time I did this, I realized I needed to focus on improving career satisfaction and spending more quality time with my boys.
The dashboard and the energy journal ultimately helps us identify the areas where we feel like we have the most opportunity for improvement.
Step 2: Generate and prioritize ideas
The next phase is to ideate and plan. To get started, I use mind mapping, a way to consider and present ideas visually. It is a thinking tool to structure information to analyze, comprehend, recall, and generate new ideas.
I recommend starting with a central idea and then building from there. As I mentioned, one of the things that brings me deep joy and gives me energy is doing work that elevates and empowers other women. So, one of the maps I developed centered on that. Each of its branches represents how I can directly help other women or actively contribute to larger social movements that empower women.
For example, after identifying that volunteer work could be a path to bring me more joy, I accepted a position on the board of Women Helping Women, a Cincinnati-based nonprofit that helps people affected by domestic violence.
The politics branch on this mind map is another one I've been heavily focused on both in the 2018 and 2020 cycles, using my time, money and connections to help support female candidates.
A finished mind map can help you see patterns or put disparate ideas together. It helped me realize the breadth of ways I could incorporate this passion into my life. For example, I could make it a crucial part of my work or include it as part of my volunteer time.
Step 3: Design Prototypes
After brainstorming all of the ways that we might bring more joy into our lives and spend more time doing things that give us energy, the next step is to develop three versions of a “roadmap” for how life might unfold for the next 3-5 years. I like using the three roadmap versions suggested by Evans and Burnett:
My first ones focused on career, passion, and travel I could do with my family, but I've seen roadmaps that only focus on health, relationships, and finances. Here’s my five-year roadmap from 2017. It is remarkable that most things on my 'Shoot for the Moon' life have come to fruition. I should have dreamed bigger.
Step 4: Test the Prototypes
We build our life roadmaps around hypotheses that we need to test. For example, will I enjoy being a business owner? Would taking a month-long RV trip across the country with my teenage boys actually be fun? Or, in the case of my flower arranging friend, is there a limit to how much she loves flower arranging? Could this be a full-time career or just a hobby?
The first step in this phase is to test all of our ideas using prototypes or minimal viable products. For example, before renting an RV for a three-week cross-country trip with two teenage boys (it was pre-COVD, but yes, still, I honestly thought this would be a good idea), I prototyped it by renting an RV for a night and driving to a nearby campground. We hated the experience and I'm so glad we tested it before packing up for three weeks.
My flower arranging friend decided to test being a full-time flower designer in Paris by enrolling in a two-week course at a floral school in Paris. It turned out that it was not as much fun as she thought it would be. Now she knows the limits of her love for flower arranging and still finds joy in it by keeping it a hobby rather than a full-time endeavor.
Step 5: Take Action & Iterate
Product roadmaps are only dreams without detailed plans to implement them, to paraphrase Antoine de Saint-Exupéry (“A goal without a plan is just a wish"). Similarly, 3- to 5-year life “plans” are only dreams without more concrete action steps.
Borrowing a page from lean innovation principles, when setting life innovation goals, focus on milestones, so what will you do next week, next month, next quarter to move towards your vision.
We may also want to do many things in our 3- to 5-year life plan that may require small daily or weekly activities to achieve. For example, if I want to climb Mt Kilimanjaro next year, I need to book my guide and start my training plan this year.
Finally, we need to measure our progress. I find it most useful to protect time on my calendar weekly, monthly, quarterly to review my goals and plan my action steps. Here is the planning cadence that has been helpful for me:
Most of this is done independently. But, independently doesn’t mean alone. I have found that having the support of a group of people or a person such as an accountability buddy is vital for making our "life innovation" dreams a reality. In 2018, I started a Friday morning 30 minute phone call with an accountability buddy and it has been a game changer for me. We hold each other accountable, talk through obstacles we are facing, and offer feedback and encouragement along the way.
Again, I wanted to share my experience because it has worked so well for me in designing creative ways to pursue my dreams, despite constraints. Whether in life or with our businesses, it is rare for true innovation or transformation to happen without some "process" and my process follows the steps I outlined: defining the opportunity, designing and developing ideas to try, testing those ideas, creating plans, evaluating what is working, and continuing to iterate.
As always, if you want help innovating your business, please reach out.
Imagine you run a marketing consulting firm. The firm has a market intelligence database and data analysis methodology that it uses as part of its highly customized consulting engagements. It’s pretty lucrative.
But you are finding that it’s hard to grow. The problem is the firm can only grow revenue as fast as it can add and train staff (especially if you want to maintain the quality of service you are known for in the industry). Adding people is slow and expensive.
But, your firm could grow its revenue and improve its profit margin by offering that database and data analysis as a “product” for companies to subscribe to and access through a self-service portal. You could package the database and data analysis methodology into a product to be sold alongside the less scalable customized service of your consultants’ time.
This is not a hypothetical example. This is a company we recently worked with to help productize their services and productization is an increasingly popular strategy for many business services firms (consulting firms, agencies, other professional services).
What do we mean by product? For Vecteris clients, a product is a scalable, often tech-enabled, tool or program that can be standardized, packaged and sold. Just like a tube of toothpaste that you might buy at a store, a product has a name, a predefined set of features and benefits, and a set price. For example, content (e.g., research report, book), an event (e.g., training course, conference), software that automates a process or algorithm, or a unique data set.
It helps to understand the different flavors of productization available to business services firms. Here is a simple framework that I developed to map out how an organization that provides customized services could evolve to also provide scalable products:
As an organization moves from customized services in the lower left, to products-as-a-service in the upper right, the use of technology tends to increase (the X axis) as do the benefits (the Y axis). For example, improved gross margins, better revenue visibility, and increased company valuation.
Consider this data point:
"Consultancies, law firms, ad agencies, and other professional services firms struggle to nudge their gross margins above 40% as they achieve scale. Contrast that with product companies like Google and Adobe, which don’t have to deal with the same cost structure and which enjoy gross margins of 60% to 90%." -Mohanbir Sawhney (HBR, September 2016)
It is important to note that organizations do not have to move through each phase, but many organizations do follow this progression.
Defining the Product Innovation Ladder Phases
Starting in the lower left, customized services are human-resource intensive, knowledge-led services. Customized services can be lucrative but they are hard to scale because it requires additional people to serve additional clients. It’s very “hands-on” and key-person dependent. The consultant or partner or principal or account director tends to be what clients are buying.
The next rung, productized services, are human-resource intensive but they are standardized so that all customers receive the same experience at the same price. The service is broken down into its core components, which are sold as a defined package of services, such as the marketing example above. Productized services still require additional people to scale, but should require fewer both to sell and to deliver.
For example, WP Curve (later bought by GoDaddy) productized WordPress consulting by offering a package of website building or website fixing services. Instead of working one-on-one with a consultant to build or repair a company’s website, customers buy the package of services they need (at a fixed price) and the WP Curve team goes off to build or repair the site on their own.
The next move up the Product Innovation Ladder is to products. Here, organizations move away from offering human-powered services to products that don’t require humans to deliver the value. The list of potential products here is almost endless but common ones that our clients develop are books, asynchronous training courses, data files or syndicated research reports.
For example, one of our clients, lean strategy consulting firm The Garage Group (TGG), recently launched a series of syndicated reports. They noticed that many clients were commissioning market research on similar topics. TGG decided to create syndicated research reports that could be used by multiple companies, reducing the cost and research time for their clients.
At the top of the Product Innovation Ladder is products-as-a-service. This is where a product is delivered on an ongoing basis, through a model such as a subscription.Using the industry trends report example, instead of the customer buying just one report, a customer pays a subscription fee to access a series of reports or supplemental data to complement the reports. The service is the ongoing supply of information to the customer and the product is the standardized information itself. Many services firms are developing subscription-based technology platforms that are designed to be consumed alongside their traditional consulting services.
For example, Accenture’s AIP+ service blends traditional consulting with a collection of artificial intelligence (AI) technologies. AIP+ is a cloud-based platform through which Accenture’s clients can install AI tools and applications from a network of partner vendors, effectively offering “AI as a service.” By partnering with technology vendors, Accenture benefits from being able to offer AI as a service without having to invest in the engineering resources to develop those technologies in-house. Similarly, Accenture’s technology partners gain access to new clients and markets without having to sell their services themselves.
Are You Ready for Productization?
Before pursuing a productization strategy, I highly recommend assessing your organization's product innovation and launch capabilities by taking our Product Innovation Maturity Diagnostic. Our Product Innovation Maturity Diagnostic will help you better understand your team's product innovation strengths and weaknesses and identify the capabilities you’ll need to successfully pursue a productization strategy. Feel free to reach out to explore how Vecteris can help you identify your productization opportunities and next steps.
Note: This is an update on one of our earlier blogs. You’ll see some of the same ideas there, but we’ve expanded on them in this blog. That said, we shared some strategies about how you might approach productization that you might find useful to consider. Read more here.
For better or for worse, 2020 has shown us how important innovation is as a core competency. Most organizations have had to engage in some type of new product innovation—whether that be creating entirely new products or features to meet more urgent customer needs or innovating existing products to be delivered virtually.
Unfortunately, most organizations are finding they don’t have the skills, processes or even the culture to successfully innovate. Here are the top 7 mistakes my team and I see companies making:
We recently released a white paper that explores each mistake and shares how to avoid making them. You can download the full white paper here. Here is a short summary:
Mistake #1: Focusing on Processes Before People
Organizations that fail to develop successful new products typically don’t fail because their leader isn’t a visionary. It’s not that the team isn't creative or smart. It's often because, as humans, we tend to favor the routine, the known, and the comfortable. Innovation takes us outside our comfort zones into uncharted territory. It almost always requires new skills, significant behavior change, and even new organizational structures.
Unfortunately, I see many organizations underinvest in making sure they have the right behaviors and skills to support new product innovation. It starts with the leadership team modeling behaviors, such as embracing experimentation, getting comfortable with hypotheses instead of formal strategies, and encouraging diversity of thought.
For digital product innovation, the leadership team will also need to develop new skills, such as increasing their technical acumen. The organization likely needs to invest in bringing in new skills such as UI/UX design, engineering, analytics, product management, product marketing, and perhaps even a different sales approach.
Mistake #2: Starting Too Big or Too Perfect
Many organizations lose money on new product development and/or get lapped by competitors because they take too long to build and launch a product. Worse, they invest too much in a product with poor market fit. These organizations often use long waterfall development processes with “stage gates” to advance to the next level of investment. It can take many months, if not years, before they start receiving real market feedback on their ideas.
Successful product innovators adopt a more rapid, experimental approach to product development that is deliberately structured as a “build, measure, learn loop” built off of Eric Ries’s Lean Start-up principles. We:
The point is that our products do not have to be perfect to go to market. They should be good. They just don’t have to be done. We release the version that will delight customers enough to try it, then learn from what happens when they put it to work.
Mistake #3: Aligning to Favor Existing Business, Rather Than New Products
Alignment is an incredibly important component of successfully executing a product innovation strategy. A lack of alignment between shareholders on the investment required to build and launch new products is a recipe for failure. Additionally, a lack of alignment between organizational leaders on performance measures to evaluate success will doom products before they can launch.
Many new business ventures or product launches fail because organizations use the same metrics and processes to assess and manage new product launches that they use for their existing products and services. This often means new product launches get killed too early because they generate less revenue, lower profit margins, and use more resources as they go through the launch process and fail to “compete” for focus and funding with existing products and services.
Mistake #4: Developing Products that Don’t Solve an Urgent & Expensive Customer Problem
The number one mistake I see companies make is developing a new product that does not solve an urgent and expensive customer problem. Sometimes it happens when an organization falls in love with new technology and jumps to developing a product that uses the technology. Or an organization gets so focused on leveraging existing intellectual property and they forget to ask if customers really need or want it. Other times our client’s product team thinks they have identified an urgent and expensive customer problem. But it’s really only a frequently cited problem.
In all of these cases, money is wasted developing and launching new products that not enough customers will buy. Product development needs to start with uncovering the urgent and expensive problem customers can turn to us to solve. Upfront market research that captures the voice of the customers will save countless hours developing a non-viable product.
Mistake # 5: Designing and Developing in a Vacuum
Even if we take the time to conduct upfront market research to identify the urgent and expensive problems of attractive customer segments, many organizations still design and develop in isolation. Potential buyers or users don’t see the product until it is beautifully finished. When we design and develop products in a vacuum we risk missing features that the customers want and need to successfully use the product.
The most successful companies take a co-creation approach both to design and to development. Co-creation is simply involving people outside the product team in the development and ideation of a product. This includes ideating with employees outside of the core team, with customers, and with developers during the design phase.
Mistake #6: Fear of Cannibalization Hinders Sales & Marketing
Another hindrance to good product innovation is the tendency to protect what we already have. Many organizations run away from products that they fear might cannibalize revenue from existing products or services.
However, if we don't risk disrupting ourselves, someone else will. The faster pace of change, enabled by technology and the increased access to capital, have substantially increased the number of competitors most companies have, especially, digitally disruptive competitors. When we protect what we have, we run the risk of one of them making those sacred products and services obsolete.
Businesses that are willing to risk cannibalizing at least some of their existing revenue streams are more likely to survive. Many executives get caught up in the fear that more scalable (often less expensive) products will detract from, or worse destroy, their existing business. In truth, new products cannibalizing our existing businesses is the best-case scenario. Sooner or later, our revenue will erode from competitors if we aren’t willing to risk business as usual.
Mistake #7: Stopping at the MVP
“Build, measure, learn loops” are only helpful if we commit to iterating on our product based on what we have learned. This is hard for organizations who have a history of long R&D cycles or that are not used to staffing post-launch teams to learn what the market likes or dislikes so they can make the product better.
The most successful innovators form hypotheses, measure what they are learning against those hypotheses, develop new hypotheses about the next stage of growth, and reserve investment dollars and people to make the product better. A Build, Measure, Learn approach to product innovation is only valuable when we make changes based on what we learn. That means we need to accept that we will have made some mistakes, listen to customers when they point out those mistakes and fix them in our next product iteration.
The Vecteris Product Innovation Pathway
Vecteris uses a new product innovation method that is designed to help organizations avoid the top seven innovation mistakes. It accelerates product innovation efforts, brings more customer-focus and it helps organizations evolve their culture to be more innovation-friendly.
As I mentioned, you can download the full white paper here. We take a much deeper look at each of the mistakes and we also include tactics to avoid them. Or please reach out to me at email@example.com to talk through product innovation challenges you might be facing.
In this incredibly dynamic and rapidly changing environment, innovation is more complicated, but it is also vitally important for our organizations. For example, this year many of us have had to significantly accelerate digital transformation of our services, our products, and our delivery channels. We found that if we don’t continue to innovate, we risk disruption or obsolescence.
Being very deliberate about funding and resourcing is a critical part of successful innovation. This includes deciding how much to invest in incremental vs. transformational innovation and which ideas to fund. As we finalize our 2021 budgets, I want to share the tactics I’ve seen work well in making these decisions. These include:
Here is a little more detail on each:
1. Separate existing product improvement opportunities from new product investment decisions and create different budgets for each
Evaluating innovation investment decisions as part of existing “operational” budgets rarely works because new products almost always lose out to investment in existing products and services. This is because new products have less certainty and are less likely to have meaningful revenue (and even less profit) in the near term.
We recommend creating a separate budget for new product development. The size of the budget typically depends on the amount of digital disruption a company is facing. It’s important to note that research studies have found no relationship between the size of innovation budget and innovation success. What matters is how effectively we spend our budgets. That’s why we also recommend establishing an independent “product innovation board” to review and govern the new product development budget. The group should receive regular updates about new product development and launch progress and make go or no-go decisions on additional investment.
2. Score investment opportunities using a clear set of criteria
The leadership team will need to agree on the criteria to use to evaluate each idea and agree on the definition for each. Typical criteria include metrics such as revenue potential (near-term and longer-term), payback period, and the ability to attract new customers. Whatever metrics we choose, we all have to agree and work from the same definition of each. For example, if one of the metrics is "ability to implement", how is this assessed? Time to implement? Level of change required? Number of new capabilities needed? All of the above?
These prioritization frameworks can be as complicated or as simple as we want. I’ll share two prioritization methods that we’ve seen work well for our clients.
Revenue, Confidence & Effort
For organizations that are just getting started, we recommend a straightforward framework evaluating new product ideas or incremental innovations for existing products. Many organizations that we work with use a simple method looking at Revenue, Confidence and Effort. (This is a variation of the product management RICE method, which looks at Reach, Impact, Confidence, and Effort.)
We calculate a score for each idea and then rank, prioritize, or kill them based on their score.
Bespoke Prioritization Frameworks
We can build more complex scoring models too. For example, we recently coached one company through a new product prioritization exercise and we started with a very long list of potential evaluation criteria. We then narrowed the list down to the most critical and weighted each metric. For example, ability to land new customers was weighted more highly than payback period. We also created a two-step process that first eliminated ideas that didn’t meet a set of must-haves or "litmus tests" such as the market size before scoring ideas.
Criteria can include anything important to our business goals, for example, new customer acquisition, margin improvement, revenue growth, etc. Some organizations give each criterion a weight because some are more important than others. As always, the leadership team needs to be aligned on how the criteria are defined for this to work well.
3. Look at the totality of ideas to ensure there is a strategically balanced mix of “easy wins” and longer-term transformational ideas
After scoring each idea, it’s useful to visualize the portfolio of options to see where the best options are and to see if we have a well-balanced portfolio. Deciding ahead of time how you want to balance your new product investment portfolio across different categories is akin to deciding how to allocate your personal investment portfolio across various asset classes. Less risk-averse? Have more small-cap or emerging market equities. More risk-averse? Allocate more of your portfolio to bonds and dividend-generating large-cap equities.
For example, one organization plotted the ideas on a matrix with complexity along one axis and business value along the other. 2021 revenue impact, a third dimension, was represented by the size of the bubble:
Ideas that have low business value and high complexity are “Deprioritized.” Ones with high value and low complexity are “Easy Wins.” They are immediately pursued, as are the “Strategic Initiatives” with a longer payoff period due to their higher complexity.
The leadership team must agree on what percentage of new product development should be “Easy Wins” ideas and what percentage should be “Strategic Initiatives.”
Another way to think about portfolio allocation is to look across three innovation categories: Endemic, Peripheral, and Leveraged. Endemic ideas are innovations in existing products or services. Peripheral are ones that are adjacent to existing services. Leveraged or Transformational are entirely outside the core business and often require the most time and are the most disruptive.
Again, the leadership team needs to decide what percentage of the new product development budget will be spent on Endemic ideas versus Peripheral versus Leveraged/ Transformational. Recent benchmarking research from KPMG found that the best innovators are spending more of their innovation budgets on transformational innovation than less successful innovators. In fact, the most successful innovators allocate 37% of their portfolio to transformational/leveraged innovation.
4. Revisit the assumptions we’ve used to make these decisions at least quarterly, and re-prioritize as needed
We also want to establish a regular cadence of reviewing the progress of our new product ideas and reallocating resources based on new information. As we learn more about the market, and the product development requirements, our potential and complexity scores will change. We recommend meeting monthly to review the portfolio when you are getting started and quarterly after you have an established portfolio of both existing and new products you are managing.
Ask for Help Even when following the four steps, we might need some outside facilitation and expertise. Vecteris offers an Innovation Portfolio Assessment to help identify and score new product ideas. Our clients find that it helps to have an external facilitator help kill some sacred cows and ensure the team sticks to a disciplined prioritization process.
Please feel free to email me to learn more.
Many times, big problems are solved with small tactics. For example, my phone chargers frequently frey at the connectors. However, a small tactic – covering the connector with the spring from inside of a pen – can prevent the frey. One broken pen saves me hundreds in new charging cords.
I spend a lot of time running Design Sprints for our clients. I’ve found that there are several valuable tricks I use in a Design Sprint that business leaders can use to not only innovate faster but also to quickly build consensus and strengthen teams.
Essentially, a Design Sprint is a structured but very quick way to design a solution to a problem. (If you aren’t familiar with Design Sprints check out my last blog here). The techniques used in a Design Sprint aim to collect feedback from everyone in the room, spark creativity, push the group to make decisions, and build consensus.
These techniques are also effective in everyday business situations. They can:
Here are a few techniques that I recommend trying the next time you need to quickly build consensus among your team members.
4 Design Sprint Techniques to Try in Everyday Business Meetings
Technique 1: Note & Vote
Design Sprints use a “together alone” approach to brainstorming. I love that this gives ideas from quieter people equal weight with the ideas from the more outspoken.
How it works:
Each person writes down as many ideas as they can on sticky notes. No discussion. This should last 5 minutes max. Yes, set a timer.
You can set a guideline that everyone writes at least 3 ideas. If people are enthusiastic and write 10 post-its or more ask them to pick their top 3-5 ideas.
Post them (see my blog here on how to do this in a virtual working environment). Again no discussion.
Everyone received dots to vote for the best ideas. They can vote for their own. They can put all their dots on one or spread them out.
How many dots? Count up the ideas posted and divide by 2, that is the number of total dots. Divide the dots to all the people in the room.
Now rearrange the sticky notes based on votes starting with the most dots at the top. It often looks like a tree.
Congratulations to the team! A decision has been made!
Advanced option 1: If you have one person in the room that is the ultimate decision-maker you can give that person 1-2 additional dots to provide added weight.
Advanced option 2: Alternatively, the ultimate decision-maker can have a different color dot(s). Ask them to wait until voting has taken place. They then choose the final ideas based on the voting of their team.
Technique 2: Effort vs. Impact
You may find yourself in a meeting arguing over many competing ideas. Perhaps even after a Note & Vote, four ideas received an equal rating. Now what?
No problem, Effort vs. Impact to the rescue.
How it works:
Take your top-rated ideas and hold them over the middle of your Impact v. Effort grid.
Start with impact and ask the team, “with this challenge do you think this idea has greater or less impact” and move up and down.
The team answers with only higher or lower--this isn’t an invitation to discuss.
Once the team has agreed on impact, ask the same question of effort.
For the ideas that fall in the:
Technique 3: Crazy Eights
No, I don’t mean the card game. Crazy Eights is a technique for a group to quickly produce as many solutions as possible. It is particularly helpful when a team doesn’t feel particularly creative and needs to warm up a little before getting down to drafting a solution.
How it works:
Give each participant a piece of plain white paper.
Ask them to fold it in half three times to have 8 boxes.
Set a timer for eight minutes.
Everyone receives one minute to sketch one idea before moving on to the next idea. They can sketch eight completely different ideas or two ideas with four iterations each or any other combo they like.The key to Crazy Eights is that these drawings are just for them, not to share.
The Crazy Eights exercise becomes an easy stepping stool and takes a lot of the pressure to perform out of the whole ideation process because we get the chance to test out little ideas without the pressure of sharing with the broader team. With Crazy Eights there is no need to be perfect. There isn’t even the need to have the right solution.
The next step is to build out a full idea, concept or solution which is so much easier with your favorite Crazy Eight ideas.
Technique 4: Timeboxing
So this isn’t an activity like the others on this list but it is still a valuable technique I recommend.
In Design Sprints, everything is timeboxed. When you know you have five minutes to Note and five minutes to Vote, people feel less compelled to discuss. Any conversation that does happen must be simple and straight to the point.
You can use a large timer or if you are working virtually tools like Miro or Mural have timers built-in.
Those are my favorite Design Sprint techniques to make our day-to-day meetings more productive. Do you have other favorite techniques? I would love to hear about them.
If you are interested in exploring a virtual Design Sprint to get your team moving faster and taking action, schedule a free consultation now.
What do Slack, IBM, McKinsey, Stanford, the City of Chicago, and the National Gallery of Art have in common? They all solved urgent and expensive problems using Design Sprints - a unique process for quickly solving our customers’ urgent and expensive problems through ideation, prototyping, and testing.
Design Sprints were developed by Jake Knapp, John Zeratsky, and Braden Kowitzwhile working at GV (formerly known as Google Ventures). Together they worked out a way to apply design thinking to help companies build and test a prototype in just five days. The process was refined over the years as it was tested with startups, multinationals, agencies, universities, governments, and even museums.
They solve many common innovation pitfalls, such as:
You get the idea.
When projects drag on (and on) companies miss out on new sales opportunities, risk losing ground to competitors and waste thousands maybe millions of dollars.
How We Adapted Design Sprints for B2B Services Companies
Vecteris is Design Sprint certified through AJ&Smart. If you haven’t heard of them, AJ&Smart has been conducting Design Sprints since 2016 when it first became a real thing. And, more recently, they teamed up with the original Sprint creator and author, Jake Knapp, to teach others on the process. Through our experience delivering Design Sprints to clients, we have seen the significant time and money companies can save in designing and testing new product ideas.
But, we have made some tweaks. We've adapted the Design Sprint process to better meet the unique needs of the B2B services companies we serve who have hard-to-schedule buyers and very distinct buyer and user needs. Here are a few things to keep in mind when conducting a design sprint in the B2B services space.
1. Start with the Buyer AND Users’ most urgent and expensive problems.
No matter what, we always start with the most urgent and expensive problems. In the B2B services space, we have to consider both the needs of the executive-level buyers (for the initial sale) and the users (to ensure long term value of the customer). Often we have plenty of internal knowledge from sales, marketing, and the customer success team to identify both buyer and user needs but if we are looking to launch a completely new product or opening up a new market it is important to conduct some quick customer research in advance.
2. Understand the Whitespace Opportunities
You probably have a good sense of the traditional competitors in your market. But don’t neglect your competitor analysis work, many of our B2B clients are surprised by competition coming from digital-first start-ups that are offering both services alongside a product. We recommend a competitive scan which, combined with buyer and user research, gives companies a solid understanding of what white space opportunities there are before starting a B2B Design Sprint.
3. Prototyping is an essential part of validating your product ideas.
We know taking 5 days for a Design Sprint feels nearly impossible. Our process is 4 working days (across 4 weeks). In the first week of the Design Sprint we are together only 2 days and Vecteris takes responsibility for the prototype creation and concept testing for most of our clients. Because it’s critical that testing happens with both buyers and end-users, we made this change to be sure we could interview executive-level buyers who are hard to schedule. It takes some of the heavy lifting off our clients -- and, of course, gives them back a day.
4. Iterate, Iterate, Iterate.
Rapid iteration is one of our Vecteris Design Principles and that holds for Design Sprints too. We recommend conducting a full Design Sprint across four weeks and including one additional day for the entire Design Sprint and a second round of prototyping and testing. That way clients end with a fully vetted prototype.
Benefits of Design Sprints
Design Sprints offer numerous benefits, most of which are hard to find in a traditional stage-gate product innovation process. First, the use of a multidisciplinary team makes it easier to gain alignment across our organizations, which is crucial for effective change management.
Second, we can make faster go/no-go decisions about product ideas. Our teams get used to moving faster, and we build the rapid "test and learn" muscle that successful innovators need.
Third, Design Sprints de-risk our innovation investments because we waste less time and money pursuing ideas that don’t have good product-market fit. And this is important because we may finish a design sprint with a no-go decision. That is still a good outcome, a great one I might argue because we didn’t waste months of time and money building a product no one will buy.
Last but not least, we have a marketable, tested prototype in only four weeks.
Our B2B Design Sprint is a 4-week process for rapidly solving big challenges, creating new products, or improving existing ones. It compresses months of work into a few days. Delivered either virtually or in-person, the sprint involves 5 to 7 cross-disciplinary participants from your team under the guidance of a Vecteris facilitator. Together, they ideate and test a new idea one day a week for 4 short weeks.
Check out this page on our website if you want to learn more about the Vecteris Design Sprint model.
One of my favorite shelter-in-place binge shows has been LEGO Masters. Teams of LEGO enthusiasts compete to build original creations, and with each passing episode another team is sent home until a LEGO Master team is crowned. The show is fun, the builds are impressive and the show inspired my sons and me to haul out our tubs of LEGO and make our own new creations. It also reminded me of one of my favorite new product development tactics: co-creation.
What is Co-Creation?
In 2003, management gurus C.K. Prahalad and Venkat Ramaswamy first coined the term co-creation to describe the experience when customers and companies work together to innovate. Specifically, they defined co-creation as “the joint creation of value by the company and the customer; allowing the customer to co-construct the service experience to suit their context.”
LEGO has been a pioneer in the use of co-creation. The company enlists the help of customers through the LEGO Ideas portal. It’s an online community where fans and LEGO creators come together to suggest, iterate, and evaluate ideas for new LEGO kits. Some pretty amazing products have come from the ideas portal like Women of NASA, the Beatles’ Yellow Submarine, the DeLorean from Back to the Future, and, for my fellow binge watchers, the motel from Schitt’s Creek.
The process is simple. Customers can log in to submit an idea for a new kit. Then, the over 875,000 members vote on the kits they want to see come to life. It takes 10,000 votes for the idea to move forward, while that’s no easy feat, LEGO Ideas reduced the time to market for new LEGO kits from two years to 6 months. Of all kits developed on the platform, every single one was a best seller with 90% selling out in their first release.
I love co-creation because it keeps the customer at the center of new product development. The biggest mistake I see companies make when developing new products is not developing a product that solves an urgent and expensive customer problem. Co-creation can help us avoid this mistake.
At Vecteris, when we guide clients through new product development using a co-creation approach, that we learned early in our careers. We use a 'charter advisor' model where we invite select customers and prospects to help articulate the problem to be solved and to develop a solution. Just like with LEGO, the result has been a quicker path to products that solve real problems and delight customers.
There are two flavors of this co-creation model:
Co-Creation Model #1: Co-Fund the Development
In this model, customers agree to help direct and fund the product development in exchange for a beta customer license for the first year and favorable pricing thereafter. They also know the product will be designed with their input and testing, so it’s a safe bet that it will meet their needs.
Co-Creation Model #2: Advise, Then Buy
In this model, customers and prospects are invited to join a select advisory group to advise on product design with the opportunity to purchase a Beta license or to receive a free Beta license and then purchase post Beta.
Recruiting Co-Creation Charter Advisors
Either way we structure the co-creation, the charter advisors receive early access to the product and contribute heavily to its design. And the elements for recruiting co-creators is essentially the same in both models.
First, we start with an invitation-only, exclusive offer to be part of a group of charter advisors to design the product. We start by targeting well-known, industry thought-leaders first. Once they are onboard it is much easier to recruit the rest.
We strive to recruit a mix of existing customers and prospects to help ensure the product is designed to attract new customers. Typically, we need to have at least one pitch or prewire conversation with each invitee to secure their interest in co-creating (it typically takes more than one conversation if we are also asking for an up-front development contribution like model #1 above).
The primary value proposition for being a charter advisor is the ability to help design the product. It’s also the ability to network and benchmark with other advisors, and other optional features such as exclusive access before competitors, access to market analytics or insights generated during the product development process, and discounts after the product is launched.
Once a critical mass of advisors have been recruited - we recommend at least a dozen - we convene the group of charter advisors to discuss design questions. We’ve seen this work well as one, half-day session or across several sessions with a kick-off session to meet each other and plan the first development sprint and then meet two or three more times for sprint demos.
Co-Creation Process Success Factors
Once the advisory group is recruited, there are a few important parts of the co-creation process that ensure success. To prep for your first session, collect and share bios of all members. They will want to know who else is involved. We also need to communicate a clear agenda and attendees in advance to encourage attendance and engagement.
During the session, we want to be sure we accomplish a few key things:
Co-Creation Case Study
We’re working with a client right now, Mesh Intelligence, on co-creating a better, data-driven way to predict and manage risk in the food supply chain. We’ve helped them convene a group of 14 leading supply chain, risk, sourcing and food safety executives drawn from some of the largest and most innovative food companies around the world. We’re about halfway through the process, which so far has been a success.
To ensure that success, we took a few important steps. First, we recruited the right mix of advisors. It wasn’t easy as we were asking busy people to give up their time so we had to clearly communicate the value of being involved. Giving customers (or prospects) the opportunity to meet each other and learn from each other, having a hand in creating a product that solves an important problem, as well as early access and industry exclusivity to the product were most appealing. Last, but not least, we clearly outlined the process and the extent of their commitment (a total of five sessions, four with their peers and one individual) so that we knew what to expect. We’ve been pleased with the level of engagement and our client is getting a lot of usable insights. You can read a little about the progress so far here.
As Photonic founder and CEO, Dr. Tony Atti, puts it “Co-creation is about helping the customer imagine a different future.” One that they get to help create.
We would love to help you explore how co-creation might help you quickly develop new products. Please email me at firstname.lastname@example.org if you want to discuss your product creation goals and how co-creation might work for you.
We recently published a blog about how innovation thrives in uncertainty. Uncertainty introduces constraints which, in turn, force us to get scrappy and inventive. But many of our clients are concerned that it is hard to innovate and collaborate when many teams are still working from home.
Technology has made working remotely much easier. Tools such as Slack, Zoom, Google Drive, etc. improve communication and sharing. Tools for project management, such as Asana, Basecamp, Monday.com, give everyone a view of project status and needs. Tools for real-time visual collaboration, such as Miro and Mural, are effective for helping remote teams generate and build upon ideas in real-time.
For remote innovation, we use three types of tools: realtime whiteboards, collaboration apps and video/audio recording. Each allows our teams to connect and share ideas easily.
Tools such as Miro and Mural act like the whiteboard in your physical meeting space to help visually share ideas.
We use Miro with our clients but both tools are great. Both provide short YouTube videos to help you get started as well as plenty of templates to use. There are many features, which can feel overwhelming at first, but you won’t need most of them. I like that multiple team members can create together as if we were in the same room.
How we use Miro to co-create with clients.
A few months ago, when the world was different, we scheduled an in-person co-creation session for a client that is considering how to help nonprofits improve their earned revenue sales results. With COVID-19 putting a stop to travel and stole the opportunity to work face-to-face, we turned to Miro.
Thirteen people joined our Miro whiteboard to share their challenges, group challenges into categories, and vote on their most pressing challenges. It was fun to see collaboration happening live as sticky notes and dots flew across the screen. And the best part, after some productive discussion, it took only 20 minutes to identify and agree on three top challenges.
For the next session designed to focus on concept ideation, we gave the attendees homework to look for inspiration in other areas of their lives and bring it back to the group. They sent their inspiration to us in advance via email or text so that we could add it to our Miro workspace. We then used that inspiration to co-design new products or services that can solve the top challenges. During the actual session, the teams also drew their designs - in real life with markers on paper. They texted us a picture of their drawings which we also added to Miro for the other team members to see and discuss.
Miro gave us the capacity to interact at very near the same level as we could do in person. It did, however, take a little advance work to nail down the logistical and technical details.
To use new tools effectively, you need to prepare everyone.
We held mini-training sessions to make sure everyone could log on and get comfortable with Miro. We held ours immediately before jumping into the first session. We could have done one-on-one or small group sessions in the weeks leading up to the meeting date. We felt that this group would pick things up fast, and they did. But we kept a Miro cheat sheet in the Miro session (in a nearby “frame” as Miro calls it). Anyone could quickly refer to it if needed.
We also assigned Tool Champions who were there to support anyone who was struggling with Miro during the session. The Tool Champions didn’t need a bunch of extra training on the system to be good champions. Rather, they were people who were generally comfortable with technology and good problem solvers. We could have used a number of other team members, but we decided on champions who weren’t in the trenches so that no one felt torn between contributing and helping.
Use communication tools as a virtual water cooler
While we love structured innovation sessions, like the co-creation example above, we also know innovation develops organically all the time. For example, at the proverbial watercooler conversation when there is space for unstructured or casual conversations between colleagues. We can recreate the watercooler though, even in a virtual environment.
Using communication tools like Slack for team chats is a great way to create a space for banter and chit-chat that can lead to inspiration. At Vecteris, we have a channel for sharing life updates, inspirational quotes, jokes, and other non-project things so we can feel connected to each other. It’s in these conversations where people feel engaged with their team, serendipity can happen and new ideas blossom.
Slack also becomes the place where your team can quickly ask questions, come up with solutions much like you would walking out of a meeting or passing each other in the hallway. Teams can problem solve and connect in a shared virtual much like used to it a shared physical space.
Use recording tools to share learning (especially from customers)
A really good use of tools to support remote innovation came up recently in a peer group meeting. We host regular Product Leadership Peer Groups with product managers across a wide variety of industries to share ideas and talk through pressing issues. One of the product leaders talked about how great it has been meeting with customers on Zoom because lots of people can listen in live or playback the recorded call.
For product teams, hearing customer feedback is key to just about every stage of product innovation from ideation to iteration. Now they get the feedback firsthand, instead of through the reports from people who were in the meeting room. A few other people mentioned that they pass around recordings too because different people have different thoughts on what a customer says. The product manager isn't the one source of truth for customer feedback. It’s also great for motivation because the team gets to see how their work is benefiting the customers, company, etc.
If you aren’t a fan of Zoom, there are lots of recording tools out there like Otter.ai, Loom, and Ringr. Some of which can be used for non-video calls. Because, after all, not everything needs to be done over video. However you decide to record the call, just make sure you get the customer’s permission to do so.
But watch out, tools can also kill innovation.
Encourage employees to take advantage of the flexibility offered by remote working, not just clock time on the computer. That way they can work when they are most productive and creative. And as David Mack of SketchDec puts it, “When surrounded by Slack pings and deadlines on your laptop, it’s easy to be stuck in execution mode. Time spent with the express purpose of creating a list or doodle board of ideas is essential.”
In short, use tools well and wisely. Use them to bring ideas and people together, but don’t forget to give your team a place and the space to think.
There are a number of great resources out there to train staff on innovation if needed. Vecteris offers a Creating a Culture of Innovation Workshop to help leaders change the way they operate, organize, and think so they can create an environment where innovation flourishes. Let us know if you want to learn more.
In the meantime, I’d love to hear more about what you are doing now to encourage innovation remotely. What’s working? And what’s not?
I confess that I laughed when I saw this cartoon on LinkedIn the other day:
Certainly, the current crisis is accelerating digital transformation and innovation in nearly every business sector.
Telehealth is a great example. While there has been an increase in the use of telemedicine over the years, public health officials are pushing hospital systems and personal physicians to rapidly adopt it as part of their standard operating. In fact, the new $2 trillion stimulus package that was signed into law recently included Medicare waivers for telehealth services for the first time ever.
The phrase 'digital transformation' is incredibly broad and, in my opinion, over-used, but it typically includes three parts:
1. Operations: Using technology, and the data generated by digitization, to adapt to labor shifts, improve performance and cut costs. Examples include using new digital tools to facilitate remote work and collaborate with colleagues, manufacturing automation to take the place of labor, and use of Internet of Things (IOT) technology to take the place of in-person inspections.
2. Delivery: Using technology to change how goods and services are delivered to customers. Examples include eCommerce, eLearning, telehealth and virtual conferences. The Girl Boss Rally, for example, typically hosts about 1,300 people in LA each year. In less than 24 hours of announcing that this year's event would be digital, the company recorded 13,000 RSVPs.
3. New products: Using technology (or the data generated by digitization) to create new products and services. For example, we have many clients in the professional services industry who are trying to develop new products that are scalable and have more recurring revenue. Typically these are some type of “As-a-Service” type product such as a customized training company building learning experience platforms that are sold as subscriptions or marketing intelligence companies building self-serve predictive analytics tools.
The good news is that digital transformation and innovation actually can be easier in times of crisis. You can read more about that in another recent blog I wrote, Innovating in a Crisis. The short version is that we are our most creative when faced with constraints and uncertainty, when we have a burning platform to change processes, and when we can kill sacred cows that may be impeding progress.
The bad news is that research suggests most digital transformations and innovations fail to meet expectations because of a lack of strategic alignment, poor coordination and a lack of measurement. Gary Pisano’s article, The Hard Truth About Innovative Cultures, summarizes it best: “Creativity can be messy. It needs discipline and management.”
The work we do at Vecteris focuses on helping companies with digital transformation as it relates to revenue - new products and delivery innovations. However, the research suggests that the lessons we have learned also apply to digital transformation for operations.
Here are the key ingredients we have found will help organizations successfully accelerate their digital transformations in today's environment.
1. Identifying the right problem to be solved.
This is the time to go slow in order to go fast. This means taking the time to talk to customers so we can understand their urgent and expensive problems and, most importantly, the root causes of those problems.
A big part of this is understanding the difference between a minor annoyance or a real pain point. For example, in a recent Voice of the Customer engagement for one client, we spoke with many customers who cited ‘feeling lonely’ while on out-of-town work assignments as a problem that our client could potentially fix. However, as we dug deeper, we realized that this problem was not as painful as other problems, such as job assignment uncertainty or better temporary housing options. We recommended focusing our client’s innovation efforts on solving those problems first and think about addressing loneliness later.
The point is not to stay anchored to a particular solution or ‘surface-level’ problem. When we identify the most urgent and expensive underlying customer problem, it opens the door for a real business opportunity.
2. Quickly, but smartly, evaluate whether to build/buy/partner/not pursue
Once we know the urgent and expensive problem to solve, we need to evaluate whether it makes sense for us to build the solution, or if we should find an outside partner to help or if we should abandon the idea altogether.
This decision point is especially critical if we’re already behind in digital transformation compared to our traditional competitors or if we have a number of new digital pure plays in our market.
We need to understand:
If the answer is no to any of these, we shouldn’t start building. We either find a partner or shelve the idea.
Our teams need to be laser-focused right now and if we skip the business case evaluation phase we risk diluting focus on efforts with a low ROI. Even worse, we could set ourselves up for failure because we will be under-resourced.
Pick a few immediate digital transformation priorities and say no to everything else.
3. Designing smart 'test and learn' experiments.
Successful digital transformations embrace the use of Minimum Viable Product (MVP). The MVP is a version of your product (or your product idea) with the right balance of features to satisfy early customers and provide learning back to the development team about how the product needs to be enhanced or changed. An MVP is not a smaller, cheaper version of your final product. It allows you to test your product in real life with real people in order to validate the product’s core value. MVP tests are designed to answer technical questions about the product, prove or disprove hypotheses, and gain a feel for the viability of the product in the market.
There are many good MVP examples out there (you can find some in another Vecteris blog). One that works well in a virtual world is 'sell-then-build'. It is aptly named. First, you sell the product concept. Then, you build the actual product. We like sell-then-build approaches that use a “landing page,” directing potential customers through advertising and email marketing. That landing page is a marketing tool that allows for testing the product against market expectations and demand.
This is the idea behind Kickstarter, which we’re all likely familiar with by now. It’s a platform for sell-then-build products for creative types. The designs range from world-changing to downright wacky. For example, one woman raised over $1400, three times her goal, to create 100 little birds out of wire and felt. Who knew that there was a market for wire and felt birds? This woman does, and she learned it without first spending a dime on wire or felt.
The point of an MVP, test-and-learn approach is to create a version of our product that lets us:
4. Developing digitally fluent employees.
Digital fluency is a combination of understanding and appropriately using technology. In the simplest example, digital fluency is knowing when to use a chat program, email, or Zoom to best communicate with a remote colleague.
But to accelerate our digital transformations, we also need to make sure we have the right talent. In my experience, this almost always requires new blood. Even if we are under a hiring freeze, it is important to understand that creating a successful digital transformation and leading innovation takes specialized capabilities. Recent McKinsey interviews with digital transformation leaders found a common theme about talent: “a single digital star can lift your organization higher than a team of the next-best workers.” You may need to make a hiring freeze exception and take advantage of the great talent out there right now.
Likewise, hiring for 'learning agility' is important for long-term success. Technology is evolving quickly, so we need employees who are comfortable with self-directed learning and acquiring the skills they need to stay relevant.
5. Practicing good technology hygiene on data compatibility, technical consistency, and cybersecurity.
We should not overlook the need for security in all aspects of our digital transformations. Look at what happened to Zoom with the rise of Zoombombing and the discovery that Zoom for iOS was secretly sending user data to Facebook.
Cybersecurity has to be a top priority or we risk losing our customer’s trust. For example, according to a 2017 study, 65 percent of online shoppers who have had their personal information stolen will never return to the site where it was compromised.
Good technology hygiene doesn’t end with security. It also includes data compatibility and technology consistency. A great place to start is to make sure that your organization has developed an enterprise architecture. Enterprise architecture is commonly defined as the "process by which organizations standardize and organize IT infrastructure to support business goals." Typically, if I work with an organization that has competing applications (e.g., multiple CRMs or multiple team collaboration tools), systems that do not talk each other, and no framework for making decisions about new technology, it is a sign they do not have an enterprise architecture. The lack of an enterprise architecture is not only expensive but also highly inefficient and likely inflexible.
6. Shifting the culture and our mindsets.
A recent McKinsey study of leading innovators and digital transformers found failure to be a key to success. It’s essential to “make failure a virtue and core to your culture.” I love to remind my clients of the famous quote by Reid Hoffman, the founder of LinkedIn:
“If you are not embarrassed by the first version of your product, you've launched too late.”This quote is so important because the best way to see if a product idea is a good idea is to see if the market will buy or use it. This means adopting a test and learn methodology, as discussed in point three above, as well as becoming comfortable releasing products before they are 100% finished.
Take online education leader, Khan Academy. At Khan, the team prioritizes getting their online courses launched on their site, over getting the most perfect version of the courses out there. Their target market, namely students, are craving knowledge. So, Khan delivers a good course (that is still well-built on the tech side), but with lots of room for improvement. Then, they listen to what their users tell them about their experience with the course. That way their next iteration delivers what the users actually want and need.
This not only requires a shift in culture but we've also found that leaders need to shift their mindset. We like to call this the fearless innovator mindset.
Getting comfortable with failure is a good example of being fearless. It’s related to one of the four most important things I’ve learned about what it takes to be a fearless innovator, letting go of perfectionism. Other practices that can help us adopt a fearless innovator mindset are:
I was speaking with a CEO a few weeks ago who said his team was struggling with new product innovation. I mistakenly assumed that the team had too many ideas, could not prioritize and focus, and, therefore, were diluting their efforts. Lack of focus is a problem I’m seeing with a lot of clients right now.
But that was not his problem.
His problem is a lack of good new product ideas. He knows the organization needs to innovate and diversify revenue but the only ideas they have are operational improvements.
He thinks the current uncertainty and customer behavior changes are making it hard to develop new ideas. But he also thinks his team just “isn’t creative.”
The good news is that creativity is not a fixed quality that we are born with. It can be taught even to the most analytical thinkers among us, myself included. And the research supports this. For example, a study published in the Creativity Research Journal (yes, such a journal exists!) showed that eight months after a group of employees were trained in just four creative thinking techniques, they increased their rate of new idea generation by 55 percent.
Tina Seelig’s groundbreaking book, inGenius: A Crash Course on Creativity, explains that anyone can increase creativity, just like they can increase musical or athletic ability through training and practice. Seelig also argues that creative idea generation starts with a fresh look at a problem. “Mastering the ability to reframe problems is an important tool for increasing your imagination because it unlocks a vast array of solutions,” says Seelig. And I agree.
What I have found, is that the best place to start when it comes to reframing the problem is first collecting customer voice.
Identifying Customer Problems
At Vecteris, we typically use a modified design sprint process to help companies design new products. When we walk clients through the idea generation phase, we start by cataloging customer problems with the goal of identifying which ones are urgent and expensive.
That takes some important pre-work: listening to customers through interviews, surveys, and advisory boards. Asking about their pain points, frustrations, and annoyances. Listening to them describe their current processes, what they’ve tried in the past, what has worked well, and what they wish they had.
We can also listen to what they are saying without being prompted. Social listening is a great way to do this because it allows us to analyze the conversations and trends happening about our company and industry as a whole. We can use those insights to better understand the problems our customers are facing, not just the ones they told us about when we asked.
Customer interviews, surveys, and social listening can also help us find out which problem is most important and which problem is the most costly. Then, we can rank the customer problems based on their urgency and expense.
In addition to identifying pain points, we also need to understand how customers are trying to solve their pain points. This could range from inefficient workarounds to nothing at all. A quick competitor analysis can help us identify existing product ideas that we could improve upon. Although I always recommend following our customers’ needs, before following our competitors’ actions, there is research that says fast-followers are more successful than new-to-world innovators.
It’s also a good idea to talk to companies in adjacent spaces to hear what they are doing or considering. And not just the obvious competitors. Talk to start-ups and smaller vendors who tend to be better adept at innovation. In that vein, we should keep an eye on emerging start-ups in our sectors using tools such as CB Insights and plugging into local accelerators and innovation hubs.
Enlist Our Employees
Last but not least, enlist our employees. Yes, even if they “aren’t creative.”
We can tap into their knowledge about our customers and our competitors. Even if they are not naturally gifted at recognizing patterns or visioning, they can describe customer needs and the other players in the market. Plus, it’s a good way to let employees know that you actually want their input - which they may be holding back. A recent SHRM poll found that 38 percent of employees lacked initiative because they felt leaders weren’t open to hearing ideas or dismissed them too quickly.
If you are really struggling, I have found that with a little bit of outside facilitation to teach ideation and concept-creation skills, creative ideas can surface. Even organizations facing a creativity drought can develop a robust list of new product ideas to test. Try SCAMPER, for example. It’s an acronym for seven different types of reframing questions to ask about a product or process that we are trying to improve:
I also encourage the organizations I work with to create a volunteer team of more junior employees to be champions for innovation, creativity and applications of new technology. For example, we recently helped a client create a grassroots “Team Innovation” to:
It’s important to include employees from all areas of the company. Innovation tends to flourish in cross-functional teams because they have more diversity of perspective and can act more rapidly to develop and test product ideas (for more on how to create a culture of innovation, check out this blog).
Following this process should generate new ideas, even in the face of uncertainty. Try them out and let me know what you discover. If you are already overflowing with ideas, I’d love to hear more about your process for generating them. Please share!
Many of our clients have been asking us for advice on how to stay competitive in this rapidly changing world. Customer behavior is changing rapidly and, if they are financially healthy, your competitors are likely innovating to adapt to these changes. Other competitors may be struggling and could become acquisition targets for you to bring on new assets or new customers or both. How do we stay on top of all this?
Enter: Lean competitive analysis
Just like lean startup or lean product methods, lean competitive analysis is designed to help you quickly monitor and analyze competitor actions. It is not the type of competitive analysis you would do if you were refreshing a three-year strategic plan, nor is it what we see a lot of companies doing right now, which is no competitor analysis.
I’m still surprised how many companies run down the innovation path without a quick hygiene check on the competitive landscape. A CEO gets excited about a new idea or your sales team comes to you promising that people will buy. Boom! You are off and running, only to watch the product flounder in the market after months of long days and heartache.
What is ‘typical’ competitive analysis?
Typical competitive analysis is about developing a rich understanding of who is doing what in your market space. It answers questions such as:
In lean competitor analysis, we narrow this question list based on your end goal. What are you trying to learn? Or in Vecteris terms, where are you on the Innovation Pathway?
Where are you on the Innovation Pathway?
Are you in the discover and scope stage before building a new product? If so, focus on competitors serving your target market. This means traditional competitors as well as brand new ones who are serving the same customers and addressing the same problems but with completely different solutions. A lot of ‘digital-only’ companies may emerge on your competitor scan.
Ask are they efficiently solving your customers' most unique and expensive problems? Where is the "white space" — real customer problems that aren't being addressed by your competitors?
For example, recently, a client in the healthcare industry engaged our support for the first phase of the Innovation Pathway (Discover & Scope). Their executive team was considering a large investment in a new product and wanted us to do a deep dive on new digital-only entrants, not their typical competitors. They needed to understand how well these new entrants were solving the same customer problem and how much was start-up hype. Our competitive analysis gave the board the confidence to take the next step to build a Minimum Viable Product.
In the Launch phase, we focus competitor analysis on pricing, positioning, packaging, and promotion (our version of the 4Ps). For another client in this phase of the Innovation Pathway we used competitive analysis to create a sales enablement toolkit including a pitch deck that clearly differentiated them from competitors and a sales “cheat sheet” on how to differentiate their offering versus specific competitors. These tools gave the sales team greater confidence in the product.
How to do lean competitive analysis well
The first step is to identify all the players. You may know some of the traditional competitor names. Resources like CB Insights, Owler, and Capterra (for tech products) can help you identify others. Advisors, investors, and a few customer interviews are also great sources for competitive information. Start with an exhaustive list of everyone in the space, but then do a quick competitive scan to cut the list down to just a handful of the companies that seem to compete with you the most.
Next, take a deep dive into the shortlist. Secondary sources are suitable for a first dive into the tangible and intangible assets, capabilities, níche, and current market positions. You can check advertising, sales brochures, news coverage (mainstream and business press), annual reports, trade associations, or one of the many business databases with paid walls (such as Hoovers). Social media and company websites also reveal a lot about brand identity and marketing strategies. You can go so far as to sign up for competitors’ newsletters or subscribe to their blog.
Once the data is collected, you have to analyze it and compare it to your own. There are many ways this can be done. You could conduct a SWOT Analysis to evaluate their strengths, weaknesses, opportunities, and threats. Whatever your approach, be sure to run your own business or idea through the same method you used to assess your competitors (i.e., take an objective look at your structure, sales, and marketing efforts, etc., using the same metrics).
We recommend that you continue to monitor your competitors through the rest of your journey through the Innovation Pathway. Refresh the analysis quarterly. Consider tracking metrics that speak to:
What strategies have you used for lean competitive analysis? What worked well to get you the information you needed? If you have questions about how to structure your next competitive analysis, don't hesitate to reach out.
Digital transformation is coming at lightning speed. Previously in-person services are being offered virtually. New digital products are coming to the market quickly. The way we do business is forever changing.
For example, our video platforms and remote work tools have been a beacon of light while working remotely during the coronavirus. They've offered us a chance to see familiar faces, whether those are casual social interactions or facilitated business conversations. These virtual moments keep our days feeling unique and less isolating.
While accelerating the digital transformation of products and services, it is important to remember that our sales strategy may need to change. Even if we have identified a great consumer need and developed a great product or solution to meet that need, we won't be successful if we haven’t taught our sales teams how to sell a new digital product.
No matter how fast we are moving, there are some tried and true tactics for preparing sales teams to pivot, adapt to a new product, and deliver results:
Make sure they know what they are selling. That sounds ridiculously obvious. But, when we quickly develop and launch a new product it’s easy to forget to slow down long enough to explain it to other people. Introducing the sales team to the new product and sales process is important to building trust among the sales team, and for giving them the knowledge they need to sell it.
Salespeople need to understand the “why” of this product. What problem is it solving? What is the true market for it? They must feel good about who will buy the product and how much the customer will pay for it.
And, let’s not forget that the sales team is closest to the voice of the customer and will often have opinions about the success of the product before making their first pitch.
Ask for their feedback along the way. The pace of development might be lightning-fast, but the sooner we engage the sales team, the better. It’s a way to get valuable insights into marketability and likely customer reactions, but it will also make them feel more invested in the product and more equipped to sell it.
Spend time and money on marketing collateral. We are typically thinking of the client when we develop marketing collateral and often forget that marketing collateral also gives our sales team the confidence that we’ve invested in all levels of the product launch. So, don’t skip this step no matter how quickly the product is moving.
Build a selling toolbox. In addition to the marketing collateral, we also need to give our salespeople an arsenal of tools to make their job easy. This includes things like a 30-second elevator pitch, a sales deck, a checklist, and anything else that someone learning about the new product needs to know or that you want them to know.
Incentivize, incentivize, incentivize. Last but not least, this isn’t the time to make our sales teams feel financially insecure. It is important to make sure the sales compensation model matches the new product type to get the sales team focused on where you need them.
Just like everything else when it comes to products, iterate! Evaluate the product, marketing tools, sales pitch, etc. with the team. What’s working? What needs to be revised? What additional research is needed? Keep the conversations flowing to and from the sales team.
We’d love to hear what you are doing to engage your sales team. Or if you are in sales, what’s working in your organization as it digitally transforms? To help, Vecteris is offering a limited number of free coaching sessions for leaders to advise on your product launch plan and how to set up your sales team for success. Reach out if you are interested in learning more.
The innovation I see right now truly is awe-inspiring. For example, distilleries making hand sanitizer, software companies reconfiguring software to help hospitals track and manage COVID-19 cases, massive in-person conferences going virtual, and restaurants turning into community kitchens to serve the needy. For all of the anxiety caused by the current health crisis, there is also a lot of creativity and innovation for doing good and keeping businesses afloat.
It’s interesting how a crisis – characterized by uncertainty and constraints – sparks so much innovation. When times are good, we often forget the proverb, “necessity is the mother of invention”. We mistakenly believe that more resources (time, money, talent) will help us innovate. But my current newsfeed, my client work, and the research all show that innovation can flourish in times like these.
For example, a meta-analysis published at the end of 2019 found that constraints help, rather than hinder, innovation. Oguz Acar, Murat Tarakci, and Daan van Knippenberg reviewed 145 empirical studies on the effects of constraints on creativity and innovation and found that individuals, teams, and organizations alike benefit from a healthy dose of constraints. In other words, the limits of time, money, and available materials that many of us are dealing with in the wake of COVID-19 should help us be more innovative.
As I’ve watched clients completely re-work their product roadmaps during the last three weeks, here are a few things I’ve observed about how to innovate well in a crisis:
1. Adjust Our Mindset
Innovating in a crisis requires shifting our mindset so we are not held back by fear. It is natural to have fear when there is massive uncertainty, revenue declines, and volatility. But fear is where innovation dies.
The good news is that there are specific behaviors that help us face, and move through, our fears. What I’ve observed, and personally experienced, is that we are better able to overcome our natural fears about the unknown when we do these four things:
2. Talk Directly to Customers
Innovation starts with identifying an urgent and expensive customer problem. There are many tools we can typically use to identify customer needs (surveys, focus groups, etc.). But our best tool right now is to directly talk to customers and end-users.
Speaking directly with customers is the fastest way to understand the challenges they are facing and what they need to address those challenges. People want to hear human voices now, too. I especially caution against email surveys, landing page or email testing right now because things are so chaotic that it might get lost in the noise. Instead, let’s use this time to talk to customers while also building connections.
3. Follow Your Process, Quickly
Just because we are in crisis does not mean we throw out good product innovation hygiene. We still need to validate the consumer need, test, and learn. We just massively fast cycle the process. Two-week sprints become one-week sprints (or less). The Director of the FDA recently spoke at a press conference where he said, “Innovation that normally takes years is being pushed to a month.” That doesn’t mean they are throwing due diligence out the door. They are just accelerating that diligence.
4. Build Flexibly
Once we start building a new product, the architecture should be as flexible as possible because things are shifting rapidly. For example, use a more modular architecture, place a premium on flexibility when making design decisions, and delay hard-coded decisions until products are tested.
I’d love to hear how your organizations are innovating despite having constraints and uncertainty– share some inspiration, please!
Some call it a Minimum Viable Product or MVP. Others call it a “Minimum Desirable Product” (MDP) or even “Simple, Complete and Lovable” product (SCLP). Whatever vernacular you choose, launching your Minimum Viable Product (MVP) is about more than just getting to market. The MVP is a version of your product (or your product idea) with the right balance of features to satisfy early customers and provide learning. An MVP is not a smaller, cheaper version of your final product. It allows you to test your product in real life with real people in order to validate the product’s core value. MVP tests are designed to answer technical questions about the product, prove or disprove hypotheses, and get a real feel for the viability of the product in the market.
An MVP can help you avoid costly mistakes. Take Smith & Wesson's mountain bike flop in 2002. When you think of Smith & Wesson, images of bikes aren't likely to pop into your head, unless you are a police officer. Smith & Wesson has been making mountain bikes for police officers for decades. Given the success there, they decided to release a mountain bike for the general public. But the general public wasn't having it. The bikes were priced too high and diverged too far from what people expected to see from the Smith & Wesson brand. Good MVP testing would have either killed the project early or helped the company find a way into the consumer biking market that people would accept.
We draw from three proven methods to test our client’s MVPs (or MDP or SCLP, or whatever you want to call them).
Sell-then-build is aptly named. First, you sell the product concept. Then, you build the actual product. We like sell-then-build approaches that use a “landing page,” directing potential customers through advertising and email marketing. That landing page is a marketing tool that allows for testing the product against market expectations and demand.
This is the idea behind Kickstarter, which we’re all likely familiar with by now. It’s a platform for sell-then-build products for creative types. The designs range from world-changing to downright wacky. One woman raised over $1400, three times her goal, to create 100 little birds out of wire and felt. Who knew that there was a market for wire and felt birds? This woman does, and she learned it without first spending a dime on wire or felt.
You don’t need to use an official sell-then-build platform, like Kickstarter, to test your MVP. A landing page on your company website will do. The landing page needs to explain the product’s features and the problem it will solve for customers. Depending on the product, the landing page can get people to pay in advance or be added to a waitlist that ensures they are among the products first buyers.
To be clear, this isn't an email grab. You want to gather feedback from page visitors and measure genuine demand for the product. This usually comes in the form of people signing up for your waitlist or giving you money in advance. You can also collect feedback from a short survey about their interest in the product and the features they'd like to see. [Read more about Getting More Juice out of the Your Voice of the Customer Interviews]
Wizard of Oz Prototyping
Toto was the real hero of the Wizard of Oz when he pulled back the curtain to reveal that the giant talking wizard head was just a sweet old man appearing all-powerful. The wizard wasn't trying to pull off a nefarious deception. His intentions were good; he just didn't have the skills yet to be good at his job. Wizard of Oz prototyping is similar in that it gives the impression that a product idea is an existing product when in actuality, it's under development. There is work being done in the background, but customers don't know it’s happening.
Wizard of Oz prototyping isn’t nefarious deception either; it’s a simulation of what the real product could look like and do. It's merely a way to avoid building expensive systems or platforms until you know there is a real demand for a product or solution. And since testing is performed manually, you can quickly modify the product to rapidly test many hypotheses in search of the most effective product.
Zappos was started using Wizard of Oz prototyping. Nick Swinmurn came up with the idea of selling shoes online when he struggled to find a pair of boots he wanted. He was at a shoe store in the mall when the idea struck him. In an interview with Fortune, Nick says he approached the store and said, "I’ll take some pictures, put your shoes online, and if people buy them, I’ll buy them from you at full price.” So, that’s what he did. He set up an online store. When people ordered shoes, he’d go to the store, buy the shoes and ship them to the customer. He was the man behind the curtain until he no longer needed to be. Now, you can hop onto Zappos.com to have any shoe you might ever want sent to your house in two days.
The Concierge Test is similar to Wizard of Oz prototyping in that the work is still being done, but, in this case, your customers know it’s happening. Concierge testing lets you try out your product idea by first providing it to a small group in beta form.
A commonly shared example of good concierge testing is the sister-team behind Rent the Runway. If you aren't familiar, Rent the Runway is an online platform enabling people to borrow designer clothing and jewelry at a fraction of the cost. The sisters behind the now $100 million company started with two beta tests. The first test offered college students a chance to come in and try on clothes to rent and return. It was a success. So, they moved to the second test which allowed women to see the clothes, without the ability to try them on. Women still rented and returned the clothes. With two successful betas under their belts, the sisters knew they had an idea that was ready for scale.
This is a very high touch form of testing, as you manually work out what the product will be, and how customers engage with it. While it is intensive, concierge testing gives rich insight into your customers’ needs and desires because you are right there with them. Eventually, you can scale up the product and remove some, or all, of the human touch.
Regardless of the testing method you choose, the goal is to see how real customers engage authentically. Testing allows you to pivot your initial idea quickly and easily, if you learn that customers need or want something different, don’t let your product be the next Smith & Wesson Bike.
Have you used one of these MVP approaches or something else entirely? We would love to hear about it. Contact us.
Not sure about what MVP approach is best for your company? We can help.
I traveled to DC for business earlier this week. Not wanting to take irresponsible risks with COVID-19 (or the flu), I took hand sanitizer and a bag of Clorox wipes. I want to be responsible and try to stay healthy.
But as an entrepreneur, a mom, and a business advisor, I know I need to do more than just keep myself healthy. I need to lead my team, offer advice to clients and make sure my family is safe.
I've been asking business leaders whose opinions I value what they are doing to lead in this time of uncertainty. I am by no means an expert in crisis management, but I wanted to share the best advice I've received and how I am applying it:
1) Get comfortable with the facts
When the future is uncertain, start by understanding the facts. And please make sure your facts come from reputable sources.
The next step is to outline the best-, medium-, and worst-case scenarios in your big areas of uncertainty. So, for our businesses, this means running scenarios for revenue and cash dips, supply chain disruptions, and long periods of remote working. If you don’t know where to start, check out this McKinsey report published on Monday for inspiration. It outlines best-, medium-, and worst-case scenarios for big companies and also has actionable advice for each.
The team at Vecteris is fully distributed (i.e., remote), so my business scenarios have focused on revenue and cash flow. For each scenario, I wrote down the actions we could take to stay strong. Yes, things are continuing to evolve, but the act of imagining the worst-possible scenario and writing down how we might respond was incredibly comforting. I also suggest thinking through best-, medium-, and worst-case scenarios on how might the kids staying home for weeks or months impact you? What happens if travel restrictions continue? How could you manage each scenario?
The point is not to deny the facts or their seriousness. Scenario planning is both coming to terms with the facts and, more likely than not, discovering that the scenarios can be managed. Every situation, even the worst case, can be figured out, and a plan can be put in place. Or, in the words of Marie Forleo, “Everything is figure outable.”
2) Reframe the situation
In each of the scenarios (best-, medium- and even worse-case), there is always an abundance of opportunity. It could be everything from using the dip in the market to invest (I just noticed one friend fishing for small M&A targets on LinkedIn - seriously), to the opportunity to tackle long-delayed projects at home.
It is also an excellent time to shed things in your life or business that are not working. For some companies, that could be pruning the product portfolio, accelerating investment in new products or making overdue organizational changes.
It is also a great time to build new capabilities. Personally, that could be taking online courses or starting to tackle that pile of books you want to read. From a business standpoint, what could my team do with free time if business slows? I get excited thinking about having the time to create a new workshop offering, create new content, strengthen our prospect list, and the list of ideas goes on.
Life isn’t about waiting for the storm to pass…
It’s about learning to dance in the rain. – Anonymous
3) Be of Service
Being of service to others almost always helps me forget my own concerns. For example, how can I be of better service to my customers? The McKinsey report I referenced earlier has good advice about “getting closer to your customers” to find out what help customers need during this time of uncertainty rather than taking wild guesses.
Even better, be of service to those who are truly suffering. How can we help hourly workers or people who work in travel and hospitality? Or Uber and Lyft drivers? What about the homeless? Or the elderly? Some people will struggle with the community-wide isolation - what can we do to help them?
Consider dropping off needed supplies at a local homeless shelter (call first and ask what they need). Phone an elderly neighbor or relative to find out what they need. Be extra generous with tips. This is a drop in the bucket, I know, but it will help you contextualize your own situation.
With all the media coverage and social media frenzy, it's easy to start to panic and feel overwhelmed by the potential fallout. But there are things you can do to keep yourself, your family, and your business safe. I know I am feeling more prepared and ready for whatever the next few weeks or months have in store.
I would love to know what information sources you are finding useful and the steps you are taking. Please share!
“What’s the biggest new product development mistake you see companies make?” a client recently asked me.
I immediately said, “Creating something that does not solve an urgent and expensive customer problem.”
It’s true. Sometimes it happens when we fall in love with a new technology, jump to developing a product that leverages the technology and then end up creating a “solution in search of a problem.”
Other times, we might develop a new product to copy a competitor without pausing to ask if the competitor is successfully meeting an urgent and expensive customer problem.
Or, maybe, our product team thinks they have identified an urgent and expensive customer problem. But it’s really only a frequently cited problem. Or it is a symptom, not the root cause, of the problem.
In all of these cases, we waste money developing and launching new products that customers won't buy.
Here are a few tips for avoiding this mistake.
1. Appreciate the difference between frequently cited problems and expensive and urgent problems.
Clayton Christensen’s advice to design products that solve customers’ “jobs-to-be-done” is frequently cited among product innovation professionals. He suggests looking for “…poorly performed ‘jobs’ in customers’ lives-and then design[ing] products, experiences, and processes around those jobs.”
However, we think finding a “job-to-be-done” is not enough. We encourage our clients to find an urgent and expensive job-to-be-done to solve. We need to understand the difference between a minor annoyance or a real pain point. The difference between something that will "improve people's moods but not their lives.”
For example, we recently conducted Voice of the Customer interviews for a client. Many of the customers we spoke with cited feeling lonely while on out-of-town work assignments as a problem they faced. However, as we dug deeper, we realized that this problem was not as painful as other problems, such as job assignment uncertainty or better temporary housing options. We recommended focusing innovation efforts on solving those problems first and think about addressing loneliness later.
Cindy Alvarez, author of Lean Customer Development, has some great tips for asking the right questions in customer interviews that can help us understand how urgent and expensive a customer problem is. Here is some of her advice that I love:
Keep in mind that urgent and expensive problems are frustrating enough that people do more than complain about them. They are prepared to do something about the issue, such as paying for a service or switching providers.
2. Don’t confuse the current solution with the problem.
Consider this oft-cited example from Harvard Business School marketing professor Theodore Levitt: A potential customer needs a hole in their wall to hang a painting. The current solution to that problem is a drill. We might be tempted to create a better drill. But, if we take a step back to reconsider the problem, which is: “I need a hole in my wall,” we could design an entirely new way to create better holes in walls. As Levitt said, put it, "People don't want to buy a quarter-inch drill. They want a quarter-inch hole!"
Mobility, getting from point A to point B, is similar. When cars were invented, people stopped buying horses and buggies. It no longer mattered how fast the horse or how good the buggy, people wanted cars instead. The customer problem was mobility, not slow horses. Car companies are facing a similar market distribution felt by the horse and buggy companies. The urgent and expensive problem that cars solve is getting from point A to point B. Enter Uber and Lyft, who innovatively solve that problem.
One way to do this is to understand the root cause of the problem. To uncover the root cause, we like the five whys method. It was developed by Japanese inventor and industrialist, Sakichi Toyoda, to provide a better understanding of any problem and uncover its solution. It’s a simple process that involves asking the question “why” enough times that you get past symptoms of a problem to the root cause.
The point is not to stay anchored to a particular solution or ‘surface-level’ problem. When we identify the underlying customer problem, it opens the door for game-changing innovation.
3. Design real-life tests for your hypotheses, don't just ask questions.
Once we’ve found a problem that seems worth solving, we need to be sure. That means developing a hypothesis and testing it. A testable hypothesis should state the problem and what we expect our solution will do. For example:
To test the hypotheses thoroughly, we need to go beyond just asking customers and run live tests. This is important because:
There are a range of techniques for market testing that are fast and thorough, such as selling a product before it exists (think: Kickstarter), or building and launching your MVP (a.k.a. send a product with as few features as possible to market). Each of these approaches allows us to see whether customers will buy your product and test different feature sets of the product that entice them to or deter them from buying.
At Vecteris, we specialize in helping B2B companies successfully design and manage innovations. Our Innovations Insights service ensures your new products address urgent and expensive customer problems. Using techniques adapted from the Design Sprint process, our service includes:
Please contact me to walk you through our different Innovation Insights offerings!
I am sure you would agree, technology has changed drastically since most of us were in school, probably, even, since most of us took the jobs we are in today. Yet, despite how true this may be, the data says we aren't doing enough to help ourselves, our employees, and our organizations adapt to these changes.
According to a recent survey by Gartner, 70% of employees report that they don’t have mastery of the skills needed to do their jobs. And 52% believe they need upskilling as a result of digitalization.
We can’t afford to let our knowledge and skills stagnate. Top performing companies know this. A survey by IBM found that 84% of employees in the best performing organizations receive the training they need, compared to just 16% in the worst-performing organizations.
Classroom-based, instructor-led training, while still valuable, cannot keep pace with today’s technology-driven training needs. Science has deepened our understanding of how people learn—and we how can leverage technology to do it.
Learning Product Services
Vecteris has launched our Learning Product Services to help our clients in the learning & development space develop the products they first came to us to create the product strategy for. Here’s a brief overview of the kind of learning product services we are recommending to our clients today.
Mobile & Social eLearning
We are tethered to our smartphones for socialization, business, and entertainment. Why not use it for education? Mobile learning solutions put learning into the hands of learners, allowing them to access the content at any time and in any place. It fulfills our expectations for on-demand services. Learning providers can offer their users “just-in-time and just-for-me” training. Think LinkedIn Learning, Coursera, or Smartly (the mobile MBA), who all provide off-the-shelf eLearning courses. Similarly, our mobile and social eLearning solutions give you the power to customize content and curriculum to meet the unmet needs of your learners.
Microlearning is also an eLearning solution, but it’s taken in tiny chunks (typically, less than 5 minutes long). If you come from a more traditional learning background that required 15-week long semesters and $400 in textbooks, you might be inclined to dismiss microlearning as the lazy way out or consider it sub-par in some way. But, a 2015 study out of Germany shows that learners who received smaller bits of content took less time to answer test questions while still performing better. Bottom line: microlearning is less time-consuming and less expensive than regular eLearning. It is also more engaging and results in higher information retention.
Instructor/Virtual Instructor-led Training
As much as eLearning has to offer, some things are better learned with a guide. That’s why we also help organizations create rich, customized content that reflects their brand within a structured curriculum. Content can be delivered in person or virtually.
Virtual instructor-led training can involve scheduled courses on video conference platforms like Zoom, or through online classrooms with pre-recorded content and discussion board. This type of training allows the instructor and learner to engage from anywhere in the world.
We are excited about this work. We’ve bought on a team of seasoned instructional design and learning product development experts who have opened up a whole world of learning opportunities.
Professional training no longer requires taking people away from work thanks to an innovative new approach — workflow-enabled learning. At the most basic level, workflow-enabled learning is a training strategy that empowers your team by incorporating “learning” into their daily “workflow” with convenient and intuitive online tools that help them address job challenges in real-time. The result is greatly expedited task completion. Tracy Cyr VP of Learning at Ariel and our CEO Eisha Tierney Armstrong's were recently featured in Training Industry Magazine. Learn about how their experience with workflow-enabled learning empowering teams to increase productivity. http://bit.ly/37g26Ds
So, how’s your organization meeting the training needs of your employees or customer-base? To help our client’s kick-off 2020 strong, we are offering a limited number of “Learn to Learn” Coaching Sessions. If you are interested in talking to one of our experts on how you can use learning to support your product development send me a quick note.
Such a small, powerful, and, sometimes, frightening word. It's a word most of us hate to hear and that we don't say enough. “No," however, can be our sanity and productivity savior in our personal and professional lives when used well.
In our businesses, “No” can free up resources to pursue longer-term growth. Requests for product customization (a.k.a. one-off-work), for example, is a significant resource drain for product development teams. In fact, reducing custom development requests is the largest challenge for companies that are migrating from customized solutions to more standardized products.
Customization is often promised by well-meaning sales or account management teams that don’t fully understand a more scalable product strategy. However, if your development team is spending all of its time on custom requests, it will never have the time to make your scalable products successful.
“Simplicity boils down to two steps:
Identify the essential. Eliminate the rest.”
– Leo Babauta, Zen Habits
That leaves a lot of CEOs asking: “What can I do to reduce the amount of customized work my product development team is doing?”
I’d argue that the smartest strategy would be to correctly identify customer needs before developing new products (read our COO’s blog about how to do this), and then deliver on what gives 80% of your customers, 80% of what they need. But even when we’ve identified the product features that meet the largest customer need, we still might find ourselves with customization requests, again, typically coming from well-meaning staff who do not embrace the new scalable product strategy.
One of our clients has solved the problem of customized development requests, and they did so in less than nine months. Here’s their story.
Case Study: Reducing Customization
After decades of success selling services that were often heavily customized, our client decided they needed to build more scalable, technology-based products to effectively compete in a changing market. They did not have new investment dollars to fund building more scalable products, so they diverted their existing product development teams away from customized work toward building the more scalable products.
The shift started, first, with the CEO and the Head of Sales, announcing the strategy change at the annual sales kick-off. Knowing that they could not flip a switch and completely stop custom work for clients, they also created a way for the sales and account management team to request an exception on behalf of a client. This came in the form of a “help desk ticket” that was first reviewed by the product team and ultimately decided upon by the Head of Sales and the CEO, if necessary.
When completing this customized work request ticket, the submitter had to outline a super simple business case:
Once our client started implementing this process, many requests that may have been fulfilled before were automatically dismissed because of a lack of a positive ROI. It’s a lot easier to assess the value of a customization when it is spelled out in front of you in black and white.
The big help, especially for sales team engagement, was that it wasn’t the product development team saying, "no,” rather it was the leadership team, including the Head of Sales, saying “no.”
Additionally, the executive team and sales leadership could turn to the salesperson and say, “go look for something more profitable.” Even if the immediate request was denied, the door was open for a viable solution.
Our client started with a goal of no more than 25% of total product development teams’ effort being spent on client custom projects. In January of this year, they were at about 40%. In the last three months, the average was about 15-20%. That is a 50% decline!
Saying "no" to clients isn't always easy, which is why putting a process together to build the case for "no" is essential. We like our client's strategy to reduce customization because it allows for thoughtful consideration of the impact on the company's scalability and revenue goals.
What other strategies have you tried to reduce custom development requests? And how successful would you say they were? What do you think of this approach?