Here are six important questions for innovation:
1. What’s the Distinctive Value Proposition?
The new offering must help the customer make progress. How does the customer benefit? How is their life made easier? How does this compare to the existing offerings? Summarize the difference on one page. If the innovation doesn’t help the customer make progress, it’s not an innovation.
2. Is it too big or too small?
If the project could deliver sales growth that would dwarf the existing sales numbers for the company, the endeavor is likely too big. The company mindset and philosophy would have to be destroyed. Are you sure you’re up to the challenge? If the project could deliver only a small increase in sales, it’s likely not worth the time and expense. Think return on investment. There’s no right answer, but it’s important to ask the question and set the limits for too big and too small. If it could grow to 10% of today’s sales numbers, that’s probably about right.
3. Why us?
There’s got to be a reason why you’re the right company to do this new work. List the company’s strengths that make the work possible. If you have several strengths that give you an advantage, that’s great. And if one of your weaknesses gives you an advantage, that works too. Step on the accelerator. If none of your strengths give you an advantage, choose another project.
4. How do we increase our learning rate?
First thing, define Learning Objectives (LOs). And once defined, create a plan to achieve them quickly. Here’s a hint. Define what it takes to satisfy the LOs. Here’s another hind. Don’t build a physical prototype. Instead, create a website that describes the potential offering and its value proposition and ask people if they want to buy it. Collect the data and refine the offering based on your learning. Or, create a one-page sales tool and show it to ten potential customers. Define your learning and use the learning to decide what to do next.
5. Then what?
If the first phase of the work is successful, there must be a then what. There must be an approved plan (funding, resources) for the second phase before the first phase starts. And the same thing goes for the follow-on phases. The easiest way to improve innovation effectiveness is avoid starting phase one of projects when their phase two is unfunded. The fastest innovation project is the wrong one that never starts.
6. How do we start?
Define how much money you want to spend. Formalize your business objectives. Choose projects that could meet your business objectives. Free up your best people. Learn as quickly as you can.
Image credit — Alexander Henning Drachmann
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