By: Tal Raeside
In a time when innovation and new product development are vital to remain competitive, large organizations are looking for ways to generate and execute new product ideas while mitigating risk. Increasingly, these companies seek to create a startup culture as a means to generate innovation.
While many potentially valid ideas are identified, few are pursued when a company lacks the strategy and infrastructure to bring these ideas to fruition. Many companies do not have the ability to productize ideas, even if only to develop prototypes and put them in users’ hands in a reasonable time frame.
Developing an efficient mechanism for getting products from the idea phase to initial prototype (and then to market) has significant benefits:
- Quicker idea validation. The product development cycle begins much sooner and the time to validation is shortened. This enables the company to arrive at a “go/no go” product decision within weeks rather than quarters.
- Cheaper and lower risk idea evaluation versus a full blown product launch .
- Management has the opportunity to be involved in product evaluation, rather than being removed from the product development and validation process.
- An increased sense of reward for the idea generator(s), fostering a culture of innovation for the company as a whole.
Identified below are several tools for getting products from the idea generation phase through initial prototype and then to market:
One lower cost, lower risk method for testing product viability and bringing products and services to market is Rapid Prototyping. This involves instituting processes to quickly convert ideas, even if they are only 25-50% complete, into live products that can be placed the hands of potential users or testers. Zynga, the social gaming company, was a pioneer of releasing games that were less than 100% complete and leveraging user feedback for product enhancement. While Zynga’s overall business model has been tested over the past several years, their ability to rapidly develop, iterate and improve their games can be leveraged broadly in software and product development.
Rapid prototyping has several requirements and attributes, including:
- Robust and flexible product development expertise, as the ideas may be broad in nature.
- Expedited development capabilities, often executed without a complete set of user requirements.
- Internal rapid development capability or effective outsourcing via strong third party relationships. Both approaches typically require introducing external personnel and methodologies.
Leveraging internal resources for idea generation
Tapping into an organization’s typically underutilized internal resources can help generate solutions to customer pain points. In the process, however, the organization may produce an unmanageable number of ideas, many of which are not product-worthy or supported by a strong business model. While only one in 20 ideas may be worth exploring, several impactful products may result from internal idea generating efforts.
In order to properly generate and manage internally sourced ideas, companies should address the following:
- Create a repository of ideas, generated from across the organization, including problem addressed, features, use cases and authors.
- Develop a straightforward methodology to evaluate ideas.
- Rank ideas based on customer need and commercial success probability.
- Estimate resources required for initial prototyping and minimum viable product (MVP).
- Create a feedback loop for ideas that pass the initial screening. Keep the originator informed and provide him or her the opportunity to stay involved with the idea as it advances through the testing and development phases.
Some large, multinational organizations, such as MasterCard and Deutsche Telekom, have developed internal “labs” to generate new product ideas and bring these products to market. These labs have several objectives, including:
- Develop a platform and methodology for new idea generation.
- Create internal awareness of the company’s quest for new products.
- Establish a vehicle for internal product development and validation.
- Create a platform to interface with third party developers and partners.
- Signal to the market that the organization is interested in external partnering and collaboration.
- Identify potential partners and/or acquisition targets.
While an internal lab can be an effective vehicle for generating ideas and developing products, it can also create the perception internally that the group is merely a “skunk works” initiative and not core to the business. Management must be diligent in integrating the lab’s message, methodology, and personnel into the broader organization in order to facilitate effective company-wide collaboration.
Product innovation and getting new product to market quickly is increasingly important but often difficult to execute. Management can help by developing an environment that supports rapid prototyping, harvesting internal ideas, taking calculated risks, and eliminating friction in getting products developed and into the hands of potential users. Internally generated products often solve customer pain points, and with proper recognition, inspired employees may continue to produce innovative ideas for years to come.
By Tal Raeside
About the Author
Tal Raeside is Managing Director at Insight Strategic Services, a consulting firm focused on the worldwide mobile, media, technology and digital convergence industries. He works with Fortune 500 companies, start-ups, and leading technology-driven firms on strategy, innovation and product development. Over the past 20 years Tal has served as a senior executive, advisor, management consultant and entrepreneur focusing on global strategy execution, partnerships, and fostering innovation within large and small organizations worldwide. He obtained his MBA with honors from the University of Chicago Booth School of Business and earned his B.S. with honors from Carnegie Mellon University.
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