2 Big Lessons for Successful New Product Innovation
Over the past year, I’ve had the privilege of meeting many senior executives responsible for the new product innovation process. A number have asked me a really simple question that is very hard to answer:
“What one thing can I do to dramatically improve new product innovation success?”
New Product Innovation Failure Points
I’ve thought about this question a lot. The failure points in innovation are many:
- Only about 25% of new product concepts address an important consumer need or desire, meaning that most new ideas don’t.
- Even among compelling new ideas, the likelihood of success drops by half once consumers have evaluated the product and the concept.
- And even among propositions with both strong concept and product, fully one-quarter don’t succeed in market due to weak execution of one form or another.
You could choose to focus on any one of these areas to improve results. But, in my opinion, you’d be focusing on the wrong area.
Focusing on the Innovation Process
Rather, if you were to only do one thing to improve new product innovation success, I’d recommend that you focus on the new product development process itself.
Over the years, we’ve learned two very important lessons that every senior executive should understand about the new product development process
1. Stage Gates and Success Criteria Matter―In the era of agile development and lean start-up, there’s a tendency to dismiss stage gates as old fashioned and out of date. Some companies have abandoned them altogether.
But stage gates have always served a very useful purpose―they enable companies to balance investment with learning and increased confidence in new product success. The more confident you are that your new item will be successful, the more you’re willing to invest in its development.
Most importantly, we’ve learned that companies using rigorous stage gates and success criteria are more successful with new product innovation than those that don’t. That’s because the right stage gate success criteria help teams screen out bad ideas and advance good ones that are more likely to succeed in market
2. Managing the Process with a Light Touch Matters―New product innovation is so important that many senior leaders want to be intimately involved. This is a natural inclination but not a good one. Senior leaders get involved, push their own pet ideas, and pull the team this way and that. This is not the way to empower a team.
A heavy senior management hand is not very good for new product innovation success. In fact, research shows that companies that manage the innovation process with a light touch are significantly more successful than those that don’t. This empowers teams to fully develop, refine, and test ideas without the bias and often misguided direction from senior management.
My Simple New Product Innovation Advice
So my advice for improving the new product innovation success rate boils down to this:
“Use stage gates rigorously, but manage teams lightly.”
This is the simplest recipe for improved new product innovation success―not the latest tool, technique, or innovation fad. And sometimes simple is simply better than the alternatives.
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