B2B Organic Growth Series: Chapter #19
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There are two innovation problems: “What’s the question?” and “What’s the right answer?” Most companies waste R&D resources because their solutions don’t address real customer needs.
b2bgrowth.video/19 Video length [2:22]
Research shows only one in four new product projects is successful once the product development stage begins. With Six Sigma production, you have three defects per million attempts… while new product development is stuck at three defects per four attempts!
Let’s explore why. Does your company have bright R&D people to solve customer problems? Sure, but do your competitors also have bright R&D people?” Of course. Then how will your company win? What if your R&D worked only on problems customers truly cared about, while competitors kept guessing what to work on?
You see, there are two innovation problems. Problem 1 is “What’s the right question?” and Problem 2 is “What’s the right answer?” Market needs and your solutions.
Which problem consumes most of your investment? Most companies spend about 90% on Problem 2. Which problem leads to most new product failures? Decades of research say the answer is “Inadequate Market Analysis.”
So most companies underinvest in Problem 1… but it gets worse. I love stage-and-gate processes, but some thinking is backwards. If you start with an idea, whose idea is it? Yours… or your customer’s?
Most companies start with a supplier solution to an assumed customer need. They run their idea by some customers, and develop it. When do they check market needs? By launching it to see if it sells!
What if we flipped the process? What if we started with market needs? Sure, one way to test market needs is launching products at your customers: “You’ll love this next one!” I cannot imagine a less efficient way to understand market needs… than going through the entire product development cycle first. Someday, people will look back and wonder, “What were they thinking?”
Fortunately, your competitors are probably using medieval catapults right now… opening the door to huge competitive advantages for you.