Innovation is, like any other process, controllable! However, only a few companies are able to control this process. In this text, I describe 3 common mistakes that lead companies to spend money in new products / services that turn out to be complete failure:
- Innovate where the market is already satisfied appropriately;
- Innovate in areas where clients are not interested in (or have little interest);
- Innovate while cannibalizing already satisfied features
Innovation is a process that helps finding solutions to unmet needs. The innovation process is all about constantly searching for new improvement opportunities.
Not so long ago, innovation was mainly driven by technological breakthroughs; however, with the increase of data available from customers, companies can focus more their own research and incorporate important feedback from users and customers.
Even though some companies have obtained good results with this approach, I believe that by applying a consistent process the results can be much more sustainable and predictable.
During the process, it is critical to identify and classify opportunities in a clear way – If you talk to your customers you will find certainly many unmet needs, however, not all can be translated into profit.
Mistake #1: Innovate where the market is already satisfied appropriately.
Companies are constantly improving their products, but, does it pay back?
Printers have been improved to increase the page printing speed. In product reviews, we see that these are compared by the number of pages per minute they can print. Do consumers need that much capacity? Another example is the mobile phone dimension. Today, we have tiny phones. Is it feasible to create even smaller phones? I’m sure it is… but is it needed?
Customers are always demanding for new improvements, but when these improvements address already fully met needs, they create less value and, often, increase the price of the product making it less attractive. When facing this situation, companies should instead focus on new product development rather than in improving current products.
Mistake #2: Innovate in areas where clients are not interested in (or have little interest).
By asking customers how they would like to see a product improved, it is easy to get a good set of requirements; however, it is important to prioritize the result by relevance according to the purpose each customer has in mind. Failing to address this prioritization can transform a great innovation in something that the customers will not value accordingly and this will limit the ability to invest in other, more profitable, innovations.
Mistake #3: Innovate while cannibalizing already satisfied features.
Customers assume that what exists today will remain and will be improved which often proves otherwise. For example, if we ask people if they would like to have a smaller mobile phone, they will certainly say that it is important, but if it means they can no longer dial the keypad numbers, this can make the product useless (unless you operate completely via voice). In this sense, we should be aware that when customers identify an improvement need for a product, they don’t necessarily think about all implications this may bring in other features that he takes for granted.
These errors can cause companies to lose money; however it can be avoided through proper identification and prioritization of improvement opportunities. In order to be good at product innovation, companies have to ensure good data collection – both in customers and in competitors or partners. Organizations must be able to analyze this data and to define clearly the objectives that each individual has for a product or service. For each one of these objectives, and with the data insight collected we should evaluate the degree of product satisfaction and importance of improvement.
Following this process based analysis, companies will be able to evaluate what are the most promising innovations and also, what are the products on the market that best meet these each individual customer need.