Some of you might already have read Jeneanne Rae’s article in Business Week, but for those of you how hasn’t here’s a brief. The article focuses on how companies can minimize the risk that change and innovation brings.
No whims allowed. You need to work thoroughly. The well-informed insights that help drive innovation don’t come lightly to any organization but they minimize your risk and increase the potential of success in the marketplace!
Expand the collection of insights to all stakeholders. Include channel partners, manufacturing partners and the rest of the entities that can make or break your success in your analysis. This is especially true for service companies who’s offerings usually has a high level of complexity.
Test to learn, not to forecast. Trying to forecast the size of the market in the early phases of development, makes no sense. Instead, budget and run small concept tests with lead users, key customers and channel partners. Avoid being forced to make changes late in the development or even worse, after launch (I guess you could put your small concept out on the market - like Google Beta - as well).
Prototype. Prototype. Prototype. The product development world has been doing this for ages to reduce risk in the development phase. However, service companies doesn’t seem to use it as much as they should, so I guess it’s worth mentioning again.
Make a little, sell a little. Low-volume testing is a version of "test to learn" and suits some industries, like software, well. It is a particularly good idea when the cost of a limited roll-out is low relative to the risk of getting the offering wrong.
Develop with a key customer. Find a key customer. Get them to pay for the development for an important initiative. Take the know-how and intellectual property develop (in that low-risk setting) and move it into a new set of offering for new or existing customers.
Mitigating the risk and balancing the innovation efforts against the existing cash-cows are highly important issues in today’s focus on top-line growth. I am interested in service innovation and service design so I like Jeneanne’s service perspective but I guess the above goes for product innovation as well.
Do you have other ideas on how to minimize the risk of change and innovation?