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August 23rd, 2016

3 Ways to Justify the Cost + Risk of Innovation

The high cost of pursuing new innovation and the associated risks are easily justified once the product is a big hit. But that’s a rear-view mirror approach.

What about when you’re deciding whether or not to take the leap? A more predictive way to raise confidence and justify innovation programs is by improving the probability of success early on.

Here are 3 ways to accomplish this:

Place your New Product Development team in the user’s shoes

There is no better way to define the inherent value of new, innovative products than to dive into the environment of use and uncover the issues, flaws, and problems that exist when users interact with the existing products available to them.

Pair your designers and engineers with real live users as they go about their routines. Watch, ask questions, and record their activity and use. Get close in. Look for trouble spots. Pain points. Frustrations. What the team observes will give insight into the specific innovation that needs to take place. It may have nothing to do with a new technology or new process that’s available to you. It may just be an “aha” improvement that saves the user time, money, and headaches. A redesign of an existing product can be a breakthrough innovation if it solves problems and makes the users’ life easier. Look at Dyson!

Interrogate your customers

If you have a one- or two-step distribution model, then no matter how spectacular your end-user innovation is, you still have to cater to the oftentimes subjective needs of these in-between customers. And when you have channel challenges on top of this, it gets even more complex.

Dealers, distributors, rep groups, retailers. They all have their own preferences and priorities, which can change like the wind across categories, buyers, and rank. We’ve been in a number of line reviews—we know.

So the vital task is to thoroughly question these customers at the front end of innovation. Assess their appetite for what you have planned. Uncover the obstacles and objections. Define the value with them, in their terms, of what the intended innovation can help them achieve.

Use objective research coupled with in-depth opportunity assessment. You may be surprised by what you hear, pleasantly so, as they warm to your involvement of them in your process.

Analyze market data and trends

This may seem like a no-brainer, but it is often not done with the rigor required. It’s pretty easy to gather industry facts and figures. However, specific data on a product category in which a manufacturer seeks to pursue innovation, is rarely accessible. So the detailed work calls for digging in.

Competitive product and brand benchmarking, with opportunity gap analysis, is a great starting point. Follow this with ideation within the identified gaps to discover opportunities to create value for both your customers and end users. Then merge all your investigative findings to prioritize various innovation pathways. Now you’re ready to apply feasibility testing to chosen routes to help inform your strategy.

Finally, don’t underestimate trends in consumer / user behavior. This arena was once easier to predict, but not these days. The accelerated pace of technology adoption, across whole demographic audiences, is just one factor that can swing the pendulum in an instant. Technology and behavior trends should be a key assessment in risk evaluation for any innovation process today.

There’s no recipe to guarantee successful innovation, but if you intelligently inform your process with these three initiatives, you will significantly increase the probability.

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