Everybody talks about innovation but not many firms can “walk the talk” and turn a creative idea into something of value. According to the Harvard Business Review only 1 in 10 new product introductions succeed in the market.
But what makes the difference between success and failure? If we knew the answer we could use innovation to drive faster growth and superior profits.
I asked 65 companies world-wide to look back at their recent projects and decide why some projects worked and some didn’t. They include IBM, Microsoft, Lloyds Bank and the RAF. Here are the conclusions of the study:
1. Know exactly who will buy your product, under what circumstances and at what price.
2. Make sure the product is high on the list of priorities for your customer and they need it urgently.
3. Your product should at least save time, save money, be the easiest to use or the most stylish.
4. Get evidence of these benefits so you can demonstrate them easily to the customer.
5. Build a team with one vision and one goal, where there is trust and everyone is motivated to succeed.
6. Make sure everyone in the team has a clear understanding of the aims and objectives of the project, as well as awareness of their own roles and responsibilities in achieving them.
7. Understand the geographics, demographics, psychographics and behaviours of your target market.
8. Know exactly how much your customer will profit or otherwise gain from using your products or services.
9. Make sure your team has inexorable energy, strong self-belief, confidence, integrity, self direction, initiative, commitment, drive and determination.
10. And make sure the team takes 100% responsibility for getting done what needs to get done, no matter where in the organisation they have to go.
When asked to rank the critical success factors, some of the comments from innovation managers were profound:
“I would take the right people first, that’s my number one. I would take an ability to understand the markets as number two. And I would take the resources to do the job as number three.
Because I believe that with the right people, you generate the ideas and the leadership and form a strategy – The team can put a structure together, and with the resources they can do the implementation properly”.
So can you walk the talk?
Overall, successful new products had considerably more time, money, and energy devoted to market-oriented activities than did failures.
In successful projects, three times as many man-days and twice as much money were devoted to preliminary market assessment than was the case for failures. Twice as much market research (measured in both man-days and pounds spent) was conducted in successful products as in failures. But in both cases, the amounts were still small.
Successful products had more than twice as much money spent on customer tests of the product, as did failures. Six times as much money and twice as many man-days were spent on the launch of successful products as for failures.
Innovation requires time – time to think, to experiment, time to talk about possibilities and ideas. People need to share their vision through curiosity, talent and motivation.