The initial success of many small to mid-sized companies comes from an innovative product or service they developed. Passionately designed, promoted, and differentiated from competitors, it resonated with their customers. However, despite this early excitement and success, many companies fail to maintain a focus on innovation.
Markets, customer needs, and technology are constantly changing. Those that recognize this and respond will drive growth and ensure a sustainable business for years to come.
So, what is the best way to innovate? Where do I start? Who manages the process?
These and other questions provide a good starting point for business leaders who seek to make innovation a part of their culture.
The best practice for developing successful innovations is to start with your customers or consumers. Take the time to learn what they really want, what they like and dislike about current products, and how your offerings and those of your competitors meet their needs.
Ultimately, a planned and disciplined process works best to ensure that only the best ideas or concepts get resourced.
This important customer feedback can be gathered in a number of ways. For example, I’ve used carefully designed phone and email surveys with existing and lost customers to gain critical insights. Hosting events at Trade Conferences also enables you to bring together representatives of the marketplace to understand customer needs.
Whatever process you use to gather the information, starting with the knowledge of what your customers want that is not being offered in the marketplace exponentially increases your probability of success.
The world is constantly changing as well as most of our industries. Standing still with current offerings means going backward as competitors or new entrants find better solutions, lower cost alternatives, or a variety of other means to win in the marketplace. So, innovation is truly essential for long-term success.
Getting the process started on the right track is key. And that’s why we listen to customers and assess competitors before we expend resources. Too many firms start with their own idea and don’t validate it with customers and the marketplace. Then at some point down the road they learn that it’s not as appealing as they initially thought.
That’s a problem. At that point, you have expended people resources and money on development and planning. So, it becomes a negative to profitability, not to mention a lost opportunity because those resources could have been working on a higher ROI activity.
The ideal approach is to build a pipeline of validated ideas that you prioritize, then align resources to develop a steady flow of innovations. The number and frequency totally depend on your industry and competitors. Some industries require multiple product/service improvements annually while others may allow a year or more between innovations that have an impact.
Who leads the innovation process? Best practices and most companies choose the marketing organization to run the innovation team. Marketing has the information and skills needed to assess the market and competitors. They’re knowledgeable about research and developing insights. And they have the creativity and leadership skills to lead a cross-functional team.
The team can be staffed with internal or external resources, but key members would include Sales, Finance, R&D/Product Development and Market Research. As you get closer to launch, ad agencies, PR, Customer Service, and other resources will be added to the Team. Why?
All these people are important to successfully execute various elements of the project.
They all know your business beyond their function and will provide valuable input along the way. For example, as the front line with customers, Sales provides perspective on pricing, timing, packaging, and a number of other areas.
Finance is discipline that may not immediately come to mind as an important member of the innovation team. But they are essential not only to track expenses, but to keep the team within goals for product costs, marketing and sales launch spending, and ultimately margin attainment.
Lastly, the Innovation Team approach has another important benefit. It starts the process of instilling innovation as a key element of company culture. Teams get energized with new ideas. They understand how good ideas are developed and ultimately see the success they’ve created for the business.
Read the next in my series of articles to learn more about why innovation is critical for all companies, and the key elements of a successful innovation program.
Topics: Business Growth Strategy, Marketing Strategy, Innovation, Go-to-Market StrategyThu, Dec 3, 2020