Addressing the unknown variables of transformative new product development


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In product development, doing what you’ve always done often leads you to where you’ve always been—if you’re lucky. In a worst-case scenario, focusing solely on tried-and-true products and markets often leads to stagnation.

Forward-thinking companies understand the importance of optimizing core products while developing new offerings that align with the organization’s mission and purpose and solve significant customer challenges.

There are two parts to this: innovation in known areas (often called core innovation), where you have experience and strong understanding, and innovation in new areas (often called disruptive innovation), where are a tremendous amount of unknown variables exist. Innovation in the core can follow an established process, but disruptive innovation is different. Simply deciding to move forward with disruptive innovation isn’t enough—there’s a right and a wrong way to go about it, and it will fail if you try to apply the same approach as you do for your core innovation.

Separate transformative and core product development processes

In a recent Innovation+Talks podcast with Noel Sobelman, we talked about the concept of ambidexterity in product development: managing both core products and potentially transformative products. It can be a challenging task because the processes are so different:

  • Core product development is a linear process, where the focus is the quality of execution at each stage, like completing deliverables and achieving defined outcomes at each significant milestone.
  • Transformative product development must be more flexible. It’s an iterative path from ideation to scale-up based on continual learning, focusing on removing risk and unknowns and validating assumptions.

As you get further away from core product innovation, risk increases. There’s no existing model for developing transformative products, so the tried-and-true methods for success don’t apply. There may be some transferable aspects of existing development processes, but a copy and paste plan won’t account for the myriad unknown variables ahead.

Implement innovation strategies for transformative products

With so many unknowns during the exploratory phase of transformative product development, it’s important that you start with the basics:

  • Identify a problem, not a solution. As we know, the best products address challenges that customers can’t or don’t want to solve themselves. The genesis of transformative product development requires a continuous education of how customer pain points evolve and determining which new challenges require the most attention.

  • Make sure solving the problem fits the missionA saying applies here: “Just because you can, doesn’t mean you should.” If a transformative product idea doesn’t support your company’s mission, purpose and strategic goals, it’s probably better to pass on it.

  • Prepare for tension. Transformative products also require utilizing the company’s existing personnel and non-human assets, but often in different ways. Resource planning can be challenging for transformative product team leaders because decision-makers will often side with core product teams with a track record for delivering revenue. You need a strategy with shared goals and incentives and a requirement that leaders address the inevitable tensions that arise between the two teams. Everyone’s goals must be the same.

  • Address the risks. Innovation governance works for core product offerings, but transformative products have no historical evidence to guide the next steps. Instead, you need innovation risk management based on a different, entrepreneurial type of innovation governance to help determine a potential product’s worthiness to move forward. This requires experiments and testing that yield learning or behavioral metrics and presenting evidence back to leadership. Evidence-based communication makes getting the human and capital resources necessary to move forward a lot easier.

In order to lead (or, in some cases, to just stay relevant) in many industries, it is necessary to do more than core innovation. It is essential for many companies to maintain and grow market share by identifying transformative products and putting the right approach and systems in place to bring them to market.

See what innovation leaders are doing to add significant value to their portfolios, launch new products faster and strategically manage their investments by exploring some of our free resources or listening to our podcast, Innovation+Talks.


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