How critical is speed to new product innovation? Imagine a project that leads to new product sales of $5 million per year, with average profit margins. What’s the net present value of launching this product just one month earlier? $80,000! That’s $4000 per business day. Think we could use a little more urgency for new ... Read More
Is your business looking for ways to accelerate its new product development? Here are four ways to do this: 1) Set clear design targets in the front-end. When the team knows what the customers wants early-on, it eliminates second-guessing, dead-end detours and hesitation. 2) Concentrate resources on fewer projects, staff them for speed, and kill any dead-end projects quickly. 3) Focus on “time-to-money” (not just “time to market”). If you engage customers throughout development, they’ll anticipate your new product and begin evaluating it sooner. 4) Eliminate “organizational friction”… travel bans, spending freezes, hiring delays, re-orgs, new initiatives, and so on.
More in 2-minute video, Pursue fast innovation
You’ve heard, “measure twice, cut once,” right? When it comes to market-facing innovation, most companies only measure after they’ve cut. They use the vitality index—a fine innovation metric developed by 3M in 1988 that’s simple to understand: percentage of gross revenue generated from products launched in the past three (or five) years. But if this ... Read More
The Vitality Index (% of sales from new products) is helpful, but it suffers from being a lagging indicator. So how would you supplement it? Any new innovation metric you adopt should satisfy 4 rules: 1) Leading: “If we do more of this it will lead to growth.” 2) Actionable: “Our employees can make this happen.” 3) Benchmarkable: “We can compare to others and year-to-year.” 4) Impactful: “Improvement will significantly drive growth.
Here are two new innovation metrics that satisfy all four rules: Growth Driver Index (GDI) and Commercial Confidence Index (CCI). These measure your growth capabilities and evidence-based customer insight, respectively. (See white paper, New Innovation Metrics.)
More in 2-minute video, Employ new growth metrics
If you want to develop a great new product, your first step should be to target a single market segment and job-to-be-done (JTBD) within that segment. A market segment is a “cluster of customers with similar needs.” If you develop one product for multiple market segments, your new product won’t satisfy any customers to the fullest extent. By definition, different market segments have different needs, right?
If your company makes colorants, your target market segment might by paint producers. But your project scope is still too broad: You need to target a specific job to be done by those paint producers. Their job might be, “production and sale of semi-gloss paint.” This is explained further in the article, Quantitative questions for interviews
More in 2-minute video, Begin with customers’ job to be done
What’s the key to accelerating your B2B business’s organic growth? The research is clear: Superior customer insight drives stronger new product value propositions… which in turn boosts organic growth. Now you can use this new Innovation Maturity Level chart to assess your current level… and plan your ascent all the way to Level 6. The ... Read More
I think the biggest mistake is failing to use quantitative customer interviews. Why use quantitative questions for interviews, not just qualitative? Two reasons. First, qualitative interviews give you reams of customer quotes with no good way to prioritize customer needs. Sure, you could count the number of times customers cite a need, but frequency of remarks is a poor substitute for customer eagerness to improve.
More important, with only qualitative interviews you’ll succumb to confirmation bias… the tendency to hear and interpret information according to your preconceived notions. With quantitative questions for interviews, you’ll have hard data on customer needs that your team hasn’t filtered or skewed. You get 100% unadulterated insight straight from the customer.
More in 2-minute video, Quantitative interviews are a must
Design Thinking vs. New Product Blueprinting? They are highly complementary, with design thinking going further in some areas… and Blueprinting going further in other areas. Bottom line: Think of Blueprinting as a type of design thinking… essentially a roadmap for front-end of B2B Design Thinking. ... Read More
Your pricing could be supplier-focused, competitor-focused, or customer-focused. 1) Supplier-focused pricing is cost-plus pricing. It’s inside-out, leaves money on the table and only indicates your pricing floor. 2) Competitor-focused emphasizes unit pricing, and is only useful for me-too products and gauging initial price reaction. 3) Customer-focused pricing reflects the economic impact on customers. It’s outside-in and does require more work for you. But if you want to maximize value capture, it’s the only way.
More in 2-minute video, Use value calculators to establish pricing
If you ran a zoo, you’d keep your jungle animals and farm animals in separate enclosures, right? Your technology development projects are untamed, jungle animals: You don’t completely understand them, and you’re not sure what they’ll do or where they’ll go next. Your product development projects are predictable farm animals. You know what they’re supposed to do, and who they’re supposed to do it for.
When you commercialize technology, you are “domesticating” wild animals for productive purposes. As a first step, you must be crystal clear which type of project your scientists or engineers are working on at any point in time. Remember, technology development turns money into knowledge; product development turns knowledge back into money. You can learn more from this white paper, Commercialize technology in 6 foolproof steps.
More in this 2-minute video, How to pursue transformational projects
Most B2B companies waste millions of dollars in failed product development. This often isn’t because their scientists can’t come up with good answers… but rather they’re working on the wrong questions. Good customer insight lets you move into the Non-Obvious zone, working on customer problems your competitors miss. ... Read More
If you sell into a concentrated B2B market (one with just a few customers), your voice-of-customer interviews should have two goals: “insight” plus “engagement.” The latter is important: You want these big customers to be impressed and eager to work with you, not your competitors.
These 10 approaches help you engage your customers when interviewing them to understand their needs: 1) Kill the questionnaire. 2) Let customers lead the interview. 3) Discuss their job-to-be-done. 4) Project your notes so they can see them. 5) Focus on customer outcomes. 6) Learn how to probe deeply. 7) Don’t sell or solve. 8) Get quantitative in your VOC. 9) Use triggers to generate fresh ideas. 10) Use B2B-optimized interview tools. (See the 2-minute video, Engage your B2B customers.)
These are explained in the article, The Missing Objective in Voice of Customer Interviews
If you haven’t explored Design Thinking for your product development yet, I highly recommend you do. It brings seven important benefits: 1) stronger value propositions, 2) rapid customer insight, 3) improved customer engagement, 4) potential for transformational innovation, 5) less squandered R&D, 6) reduced commercial risk, and 7) the erosion of functional silos.
But if you’re a B2B company, don’t simply use Design Thinking as it’s taught in design schools. You can optimize it for B2B, especially the first two steps, “empathize” and “design”… using B2B-optimized Discovery and Preference interviews.
More in white paper, Design Thinking Optimized for B2B
Portfolio management links strategy with execution for new product development. A Voice of the Customer program maximizes ROI for all new product initiatives, whether incremental or breakthrough. ... Read More