WHAT PRODUCTS AND SERVICES SHOULD I BE DEVELOPING?
The principle is straightforward. Develop the new products or services that fit in with your strategy, are consistent with your existing portfolio, have the highest margin and will sell the most!
It is interesting to consider how a number of companies become one product wonders (Lotus Notes or Blackberry) with little or no innovation, whilst others over-stretch themselves (Nokia or Pierre Cardin) and yet a third set (Apple or Samsung) seem to keep the creative juices flowing.
The eternal question has always been do I go with what market research says is the most attractive or by gut feel? Market research tends to be the safer route but it only works if you ask the right questions. In launching Fresh and Easy in the United States, Tesco asked the wrong questions and it all went south. On the other hand most of the new disruptive services – Uber for example – are by their very nature difficult to verify and so they tend to go via the gut feel route.
So, both systems can have their day but one of the best ways to foster a culture of innovation and idea generation is to introduce an iLab. This can be constituted in a number of ways but basically it is a CEO supported monthly meeting designed to come up with new ideas that can be worked up and presented to the board each month for consideration and further investigation or investment.
In terms of developing products it is difficult to improve on the Alessi system as expounded by Alberto Alessi who has worked out a structured way of bringing new imaginatively designed household goods to the market. In Alberto’s world the creative process starts from intuition and not from market research. That is not to say that he doesn’t understand structure since as he says when considering innovation people tend to want as much freedom as possible but that having “clear, reasonable and intelligent restraints” is helpful.