Pursue fast innovation

Transcript of Chapter 38

Imagine a project that leads to new product sales of 5 million dollars per year, with average profit margins. For each month you accelerate the revenue stream you gain $80,000 of net present value. That’s $4000 per business day! Think we could use more “innovation urgency”?

Consider 4 ways to accelerate your projects: First, set clear design targets in the front-end. More time in the front-end doesn’t add time to the overall project. It reduces it, because everyone knows what the customers wants. No more second-guessing, dead-end detours and hesitation.

Second, concentrate your resources on fewer projects. If your team members are over-loaded at 95% utilization, they’ll go sloooowly. But someone at 65% utilization will complete their tasks 4 times as fast. So work on fewer projects… resource them for speed… and kill any dead-end projects early.

Third, engage customers for fast time-to-money. Many companies focus on time-to-market. But when you surprise busy customers with your new product, it could be months before they start evaluating it. If you engage them early, they’ll anticipate it, and begin evaluating it earlier, for faster time to money.

Finally, reduce your “organizational friction.” These are the things companies do that turn exciting innovation … into a … slog. Travel bans… spending freezes… hiring delays… re-organizations… adding new assignments to over-worked employees… new initiatives… rapid strategy changes… and so on.

You may feel these help in the short term, but they slow the introduction of new products. These are levers you are using to throttle your own organic growth. Who needs competitors to slow us down, when we do it to ourselves?

Instead, set clear design targets… on fewer projects… as you engage your customers in the front-end… and reduce organizational friction. Your innovation will accelerate as a result.