|By Marketwired .||
|May 6, 2014 10:12 AM EDT||
LEXINGTON, MA -- (Marketwired) -- 05/06/14 -- When trying to get their ideas off the drawing board and into the market, most innovators spend too much time, energy and money using the wrong toolkit to solve the wrong problem. They try to come up with a "perfect idea" that will disrupt the market or change the world. And they apply the wrong management skills: operating and control systems that are optimal for day-to-day execution but often detrimental to the innovation process.
In reality, "perfect" ideas do not exist. Every new idea is partly right and partly wrong. In the "first mile" of development -- i.e., going from the drawing board into the market -- successful innovators use trial-and-error experimentation to refine their ideas and business model. Learning and applying such skills is the only sure path to gaining commercial traction and turning a great new idea into a viable business, according to Scott D. Anthony, Managing Partner and head of the Asia-Pacific operation of strategy and innovation consulting firm Innosight and author of the just-released The First Mile: A Launch Manual for Getting Great Ideas Into the Market (Harvard Business Review Press, May 2014).
The First Mile gives innovators simple tools to help them avoid some of the most common pitfalls of early-stage innovation. Anthony created these tools based on his work with both venture-backed start-ups as well as some of the world's largest companies -- learning from the successes and failures of innovators in businesses of all shapes and sizes, and in a wide range of markets.
"How innovators navigate the first mile will determine whether the idea flies or fails, potentially taking the entire company up or down with it," says Anthony. "Most businesses operate on a principle of maximizing certainty and minimizing mistakes, but the innovation process is rife with uncertainty, mistakes and failure. In reality, mistakes and failure are a necessary part of the process and invaluable in pointing the way toward success -- if you are properly prepared and know how to handle them."
Without The Right Skills, Innovators Are Vulnerable to Four Key Mistakes
When innovators start with the wrong objective, or misunderstand innovation's key imperatives, they are in danger of making four common and often disastrous mistakes:
- Running out of fuel: Money is the lifeblood of innovation. The right kind of planning ensures innovators have sufficient funding to keep the venture running long enough to get market traction.
- Hiring the wrong driver: Not every executive has the right skills -- it takes a unique combination of customer empathy and business savvy. A leader needs both to guide the venture successfully through innovation's first mile.
- Making a wrong turn: Innovators are often lured into empty market spaces with visions of big opportunity (e.g., "blue ocean" and "greenfield" opportunities), but sometimes these spaces are empty for a good reason and the market potential is illusory.
- Spinning out: Too many innovative businesses make the cardinal mistake of scaling too fast, before they nail the economics and business model. To succeed, first nail it, then scale it.
To Succeed, Address Three Burning Questions
"Successful innovation is all about proving you can answer yes to three key questions, rather than assuming they are all true," says Anthony. "Does anybody need it? Can we do it? Do the numbers work? If you can't answer yes to all those questions, and prove it, then the odds that you have a commercially viable idea are quite low. But if you can, you may be on a path to something big."
Three key development hurdles every idea must cross in the first mile:
1. Is there a need? - Prove a deep customer need. Establish that the customer exists; identify the job he or she is struggling to get done; prove the job is important and unsatisfied.
2. Can you do it? - Prove the concept. Confirm that the solution solves the problem repeatedly and reliably; demonstrate that it's superior to other options; define what it looks and feels like.
3. Is it worth it? - Prove the economics. Identify the sources of revenue, as well as the costs, resources and operations required to earn that revenue; identify a viable path to commercialization.
Leading an Innovation Effort Requires Specialized Skills and Systems
Anthony argues that most organizations are short on the right innovation skills, including: a willingness to experiment for its own sake; an ability to welcome and learn from the unexpected; and comfort with rapid course corrections. Most of today's top executives and managers don't have these skills because they did not grow up with the pace of change they face today.
He outlines four leadership mandates that are essential to navigating innovation's first mile:
- Piercing through the "fog of innovation" - Bias action over analysis to avoid "analysis paralysis"; focus more on learning than quantitative targets; use small diverse teams; and task decision makers with experimentation (i.e., don't let them just be "arm-chair innovators").
- Encouraging smart risk taking and not overly penalizing failure - Evaluate people more on successful behaviors than "objective" outputs; use asymmetric reward systems (i.e., large rewards for success and small penalties for failure).
- Knowing how and when to disengage, and ending the plague of "zombie projects" - Stop escalating commitments when you clearly hit a dead end; "shut it down, extract the lessons and celebrate the learning."
- Fostering connections to external experts, customers, and employees - Build formal and informal networks; leverage the "wisdom of crowds"; increase opportunities and avenues for collaboration.
As examples of successful innovators, Anthony points to companies like:
- W.L. Gore & Associates, maker of Goretex, puts experimentation at the heart of its culture: incentivizing teams to self-form around new opportunities, but also regularly giving out "sharp shooter" awards to those who "put down" dead-end projects.
- Netflix built its disruptive technologies and business model through a rigorous and disciplined approach to experimentation -- not just in moving from DVD rental to streaming video, but also in original content production.
- Adobe smartly managed the risk behind transforming its business model from prepackaged software to a software-as-a-service model by testing key assumptions in Australia before spreading the new model globally.
- Citi launched a global collaboration hub that brings together employees from around the world -- its first global challenge in 2011 generated 2,300 hundred ideas from 45,000 employees across 13 business units in 97 countries.
- Unilever maintains a "street" at its Indian headquarters in Hindustan where new product teams pitch ideas to employees.
The First Mile Imperative: Maximize the "Trial," Learn from the "Errors"
"All innovation ventures go through multiple course corrections before finding the exact right path," says Anthony. "In this process, one's arch nemesis is uncertainty in all its forms -- especially assumptions and rosy predictions that the innovator fails to question or verify."
Anthony urges innovators to follow a process called "DEFT" to test their assumptions and prove the commercial viability of their ideas:
- DOCUMENT: Identify hidden assumptions using tools like questionnaires, a single-page "idea resume" or "business model canvas."
- EVALUATE: Appraise the idea from multiple angles using role play scenarios, pattern based analysis and financial models like reverse income statements.
- FOCUS: Narrow and prioritize uncertainties using "certainty tables" and "impact assessment" to focus on the risks with the greatest potential impact.
- TEST & ADAPT: Design in-market and thought experiments that help maximize learning and apply the lessons, so you can refine your business model and strategy and reduce your risks.
He invokes many case studies to illustrate the tools and process steps, including:
- Procter & Gamble's use of computer simulations -- running nearly 10,000 market scenarios -- helped them sharpen their approach to developing in-market trials for a new probiotic product.
- Godrej & Boyce's spot sensitivity analysis to test consumer purchasing power and price points for its successful battery-powered refrigeration system "chotuKool."
- Medtronic carefully crafted pilot programs at a handful of hospitals in India, to develop a disruptive business model that brings pacemakers to patients who sorely needed them, but historically couldn't access or afford the technology.
- U.S. Navy's early testing protocols for radiation shielding in nuclear submarines.
"Great ideas and businesses are forged in the heat of the marketplace, and they never survive their first contact with the market totally intact," says Anthony. "Companies and entrepreneurs need to get past the myth of the 'perfect idea' and focus on trial-and-error experimentation, which is the true test of innovation. If you are systematic in breaking down your assumptions and proving your idea in the market, then you and your idea stand a fighting chance at disruption, and maybe even changing the world."
For a copy of The First Mile or to speak with Scott D. Anthony, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications at +1 (212) 255-8386 or [email protected].
ABOUT SCOTT D. ANTHONY
Scott D. Anthony is the Managing Partner of Innosight. Based in the firm's Singapore office, he leads its expansion into the Asia-Pacific region as well as its venture capital activities (Innosight Ventures). He has worked with clients ranging from national governments to companies in industries as diverse as healthcare, telecommunications, consumer products and software. He is the author of The Little Black Book of Innovation (Harvard Business Review Press, January 2012) and The Silver Lining (Harvard Business Review Press, 2009). He is the co-author with Clayton Christensen of Seeing What's Next (Harvard Business Review Press, 2004), The Innovator's Guide to Growth (Harvard Business Review Press, 2008) and Building a Growth Factory (Harvard Business Review Press, 2012).
Innosight is a strategy and innovation consulting firm that helps organizations navigate disruptive change and manage strategic transformation. We work with enterprise leaders to identify new growth opportunities, accelerate innovation initiatives, and build capabilities. Innosight is based in Lexington, MA, with offices in Singapore and Lausanne, Switzerland.
Sommerfield Communications, Inc.
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context with p...
Nov. 27, 2015 02:00 PM EST Reads: 407
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Nov. 27, 2015 12:00 PM EST Reads: 462
Internet of @ThingsExpo, taking place June 7-9, 2016 at Javits Center, New York City and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
Nov. 27, 2015 12:00 PM EST Reads: 538
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound cha...
Nov. 27, 2015 11:45 AM EST Reads: 536
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Nov. 27, 2015 11:00 AM EST Reads: 309
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
Nov. 27, 2015 10:45 AM EST Reads: 396
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
Nov. 27, 2015 10:45 AM EST Reads: 383
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Nov. 27, 2015 10:00 AM EST Reads: 491
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Nov. 27, 2015 09:15 AM EST Reads: 288
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Nov. 27, 2015 07:45 AM EST Reads: 422
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
Nov. 27, 2015 07:30 AM EST Reads: 318
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Nov. 27, 2015 04:15 AM EST Reads: 710
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Nov. 27, 2015 04:00 AM EST Reads: 334
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Nov. 27, 2015 04:00 AM EST Reads: 227
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Nov. 27, 2015 02:30 AM EST Reads: 460
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
Nov. 27, 2015 02:00 AM EST Reads: 520
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
Nov. 27, 2015 01:00 AM EST Reads: 430
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
Nov. 27, 2015 01:00 AM EST Reads: 565
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.
Nov. 27, 2015 01:00 AM EST Reads: 311
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Nov. 27, 2015 01:00 AM EST Reads: 468