Break The Loop Of Underperforming Innovations
The tangible sales results of new product or service innovations are directly tied to the corporate mindset and systems that created them. Mindset precedes and dictates the systems which develop & launch innovations. If these systems are geared towards optimizing efficiency and minimizing risk, then by nature innovations will remain “close in” and likely underperform. When mindsets change, so do the systems which produce innovations, which alters the subsequent launch and adoption trajectories.
Mindset can be either the biggest obstacle or the biggest competitive advantage when it comes to the success of a new product or service innovation. Traditional “fixed” mindsets optimize systems around efficiency, predictability, and reducing complexity. These systems work great for day-to-day operations and can be adjusted to easily accomodate core innovations. However, when fixed mindsets place leap innovations into existing development, manufacturing, launch and sales systems they are positioning them for mediocre performance or even failure. The resulting “orphaned innovations” become products and services lost in the marketplace with no true home.
Orphaned innovations are a source of frustration for both management and the individual contributors who created them. Post launch reviews can expose some causal factors influencing performance, but the root cause is nearly always the system which produced them. It was Dr. W. Edwards Deming who once stated, “Every system is perfectly designed to get the results it gets.” If the product or service is truly an innovation then it is imperative that it be treated as such. Yet most corporations unwittingly sabotage their own innovations while professing that they need more “big ideas.”
No matter how big the potential of an idea, placing that idea into a system that is not equipped to handle it can only yield unrealized market potential. Companies must acknowledge big ideas as new – as truly innovative – and therefore requiring modifications to existing systems. Adoption of a learning mindset is crucial. Rather than development systems that rely upon doing “what we do best”, project meetings must focus upon specific learnings which have been gained, how to adjust to them, and what needs to be learned next.
However, systems don’t end with internal development. In fact, success or unexpected failure comes from an often overlooked part of the innovation cycle – the product launch. Most innovation teams have handed projects off by this point, depositing them into the hands of ill-prepared marketing or sales teams who, yet again, insert the new offering into existing systems. Does the innovation require special training? Does it warrant a completely new marketing approach? A fumble at this point in the process results in underperformance, as treatment of the launch will directly influence adoption by the market.
Product adoption curves for core, incremental innovations are often predictable due to an abundance of historical data. They tend to follow a traditional product lifecycle path from “Early Adopters” through the “Late Majority”. But what happens when we introduce the “big idea”, which every corporate leader claims they are lacking, into the system?
The product adoption curve for big ideas looks much different. Leap innovations take longer to generate awareness and to communicate the “why” product story. The value proposition of the new offering is not always obvious to the end-user, especially in mature markets. A percentage of innovative customers and early adopters will buy in but there is a gap, or lull in the adoption curve, between the “Early Adopters” and the majority. In his book Crossing The Chasm, Geoffrey Moore famously refers to this lull as “The Chasm”. He used it in reference to the Technology Adoption Lifecycle (TALC), but decades of consumer product launch data have since proven his theory holds true for leap innovations across most categories. Despite the abundance of data, the chasm rattles management and induces corporate doubt. Support waivers and very often the innovation is left orphaned by a sales & marketing structure which was never properly equipped to support it.
Clearly several interconnected pieces of the development & launch process influence the success of a new market offering. However, they are all tied to the initial organizational mindset and systems in place. A learning mindset acknowledges up front that growth will challenge the status quo. Systems which have optimized sustainability to date are not optimized for the next big idea. Achieving full market potential requires that leap innovations be treated as such, otherwise existing market and revenue patterns perpetuate. Instead of professing a need for big ideas corporations must first ask themselves, “What would I do with a big idea if I had one?”
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Eric Seibold is an Insights & Innovation Leader at ITW Permatex. For five years prior, Eric was second-in-command at a New York based innovation firm where he worked with category leaders like Coca-Cola, HP, and Whirlpool to successfully extend brands and launch new products. This combined experience gives Eric a unique perspective, having consulted with Fortune 500 clients in every stage of the innovation process – from insights & ideation through commercialization.
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