Keys for smaller businesses seeking to develop new products
What’s harder in business than innovation? Taking a product from concept to a profitable offering in a cost efficient and timely manner challenges most organizations. From product developers right through to the sales team, virtually every functional area must work in lockstep in order for a profitable product to make it to the market while customers still want it.
All challenges aside however, companies like Apple prove time and time again that innovation CAN be done well. Although Apple might have a bit more money and resources at their disposal than most, with the right amount of discipline any company, large or small, can get innovation right. You just need to right-size the process.
Injecting Discipline into the Innovation Process
For years, large companies like Procter and Gamble, Owens Corning and Coca-Cola have successfully used Stage-Gate® and tools like it to inject discipline into their innovation process. In fact, it has been reported that between 70 – 85% of leading U.S. companies currently use Stage-Gate to drive new products to market.
Unfortunately, managers at many smaller companies look at the complexity of these programs and balk at the idea, fearing the “solution” will actually slow down innovation. What they fail to realize, however, is that Stage-Gate® is really just a framework for disciplined decision-making – and one that can be modified depending on the size of the organization and the scope of the project. It is effective for the simple reason that it provides a process to make reasoned decisions on resource allocation at each critical stage of innovation. It seems like a paradox, but discipline creates a framework for flexibility by building in a process that makes it acceptable to pivot if you need to. This is true no matter what the size of your organization.
Setting the Stage for Success
Innovation is resource intensive so a new program isn’t something you want to rush into. The further along the development process the greater the investment, hence, an effective innovation management program begins with a prioritization of opportunities and decision to focus on a critical few.
Before launching an innovation project, make sure:
- You have complete buy-in at an organizational level.
- You have clearly defined expectations and key milestones.
- Everyone who needs to has a seat at the table from the very beginning.
- Your entire team commits to disciplined decision making.
- Commitment and availability of the resources to meet the key milestones.
- You have a plan to document each stage of the process.
Putting Innovation into Action
The fewer resources you have, the more judiciously you must use them. Whereas a large company might need the full-fledged Stage-Gate process, a smaller, more nimble company can usually achieve a similar result with fewer stages. The three core stages that should not be overlooked are:
- Stage 1 – Prioritization. Which ideas merit further consideration?
- Stage 2 – Invention. Does the product meet customer needs & can it be manufactured?
- Stage 3 – Go or No Go. Are we ready to release this product and what is the plan?
What follows is a synopsis of the questions that need to be addressed at each stage. This list is by no means exhaustive, but it should be a good starting point to get the wheels turning.
- Is there a market and how big?
- Who are the customers – current or new?
- What does the competition look like?
- What is the pricing structure and cost estimate?
- How are we going to take it to market?
- To develop the product what resources are required and do we have the capabilities?
- How large are the technical challenges?
- Can we manufacture the product consistently?
- What resources/investments do we need to make this product?
- Do we have the skill sets in our labor force to make this?
The further you get through the process, the more money you have invested, and the more complete your answers need to be.
Keep the Whole Team Involved
As we mentioned above, it is important that everyone involved in new product development should have a seat at the table from the very beginning. Innovation is not one person’s job— it’s a multi-functional endeavor. By keeping everyone at the table throughout the process, it is easier to enforce accountability and discourage the squandering of resources on “pie in the sky” concepts.