WHY THIS BLOG:
Companies today need to become much better at innovation. While most organizations claim to foster new products, their actual track record is poor. Managers are using old tools and methods to shape the future.
Except for the rare companies, such as Google or P&G that are richly endowed with a culture of innovation, most managers are left to fumble or improvise a process for developing new products. Regrettably — these improvisations are likely to fail.
Yet it is the nimble smaller firm, when combined with an appropriate innovation strategy, that has the greatest chance for success.
My goal is to help those who are struggling with PD to find a successful path through the art and science of innovation.
Room For Error/in CEO-Blog/by Richard Walton
Lee De Forest was the inventor of the first amplifying vacuum tube. In a digital world it is hard to fathom that it all started with the development of this device. This led to radio, television, and the first computers.
When De Forest created his first version, a two filament vacuum tube, his theory on why it worked later proved to be wrong. The “breakthrough” came with the addition of a third filament which allowed for the signal to be amplified. De Forest then built a second flawed theory on top of his initial theory. He was later quoted as saying “didn’t know why it worked, it just did.” Needless to say patent litigation followed.
Similarly medieval navigators were able to use the sun and stars to sail ships over much of the world, even though many at the time believed the world was flat and the sun orbited the earth.
We have written about the role of luck or chance in development.
It seems we even have to provide room for error too.
While the nice phrase for this is paradigm shift, we have to ask — how tolerant is your organization around error and failure?
Good Books (Part 1)/in CEO-Blog/by Richard Walton
There are very few decent business books in general, and a rare one indeed relevant to product development. If I read one business-related book every few years it is remarkable. Time would be better spent re-reading Shakespeare, history or the Bible. Think about it: If Don Quixote is still in print after hundreds of years, might this be a more valuable read than Who Moved My Cheese?
One important contemporary book is Nassim Nicholas Taleb’s Anti-Fragile. This is the upgrade to his prior work, The Black Swan.
While some might argue that this is a book about finance, it has much broader impact.
The book has over five hundred pages, almost all of which have to be read to understand the entire tome.
One cannot easily summarize it in a paragraph – but here goes:
Major events, while in retrospect obvious, cannot be predicted. Examples might be 9/11, the invention of the micro-computer, and the Great Depression. No matter how carefully one plans, these kinds of events are missed. We need to understand that these unpredictable events (Black Swans) happen, and we need to be prepared for the unexpected.
So why is this important for product development? Readers of this blog have probably noted references to luck or chance. A Black Swan does not have to be something bad. It can well be an unexpected good event. Anti-Fragile is how to be robust in a world where we cannot predict the future.
Taking advantage of unexpected outcomes is at the core of invention.
The Chairman Wants Options/in CEO-Blog/by Richard Walton
While the odds of any particular product being a commercial success are low, commercial success may not be the only measure of accomplishment.
Next year will consumers want little cars or big cars? Are heating costs going up or down? A good product development manager provides a portfolio of options to management. By definition, if there are a wide range of options, only a limited number will be exercised.
If you have product development responsibilities, are your expectations of success aligned with your senior management?
Odds Of Success (Part 1)/in CEO-Blog/by Richard Walton
We were taught in business school that only 1 in 20 new products succeeded. There was not a lot of definition around “new” or “success”, but it was a daunting enough metric by itself.
As an adult it seems more like 1 in 50. Of course, it depends on what is meant by success and failure and one’s industry, but it remains a daunting number. I understand that in pharmaceuticals the ratio is more like 1 – 10,000!
Understanding and managing these odds have interesting implications for product developers…
Methodology Gives Those With No Ideas Something to Do/in CEO-Blog/by Richard Walton
The title above was taken from Mason Cooley’s “City Aphorisms”. You have got to love it.
In brief – here is how large corporations approach product development. It begins with idea generation. This is the brain storming – the hard-to-define process aptly called “The Fuzzy Front End”. While there are scholarly works dedicated to just this portion of new product development, this is probably the least well-understood part of the process.
Ideas that successfully exit the “front end” will then go through a series of stage/gates before finally being commercialized as a new product. These stages are relatively easy to define and are usually well-understood by the host company.
As much has been written about The Fuzzy Front End as well as Stage/Gate, I recommend other sources for a more detailed explanation.
Despite the existence of this conceptual framework, companies have a very difficult time innovating successfully.
This blog will explore why this is and what can be done about it.