Lead on Purpose

Promoting Leadership Principles in Product Management


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Leadership and innovation

How do successful leaders identify market needs and create innovative products and services to meet those needs? They start with ideas. Ideas potentially come from many sources and need to be nurtured effectively to succeed.

The June 2007 Harvard Business Review includes an article by Morten T. Hansen and Julian Birkinshaw titled The Innovation Value Chain. The innovation value chain presents innovation as a “sequential, three-phase process that involves idea generation, idea development and the diffusion of developed concepts.” Each stage of the value chain is critical to the mature development of ideas into products:

  1. Idea generation: Innovation starts with good ideas. Ideas generally come from three areas: internally (within the team), cross-functionally (from different teams within the organization), and/or externally (from customers, partners or other sources external to the organization).
  2. Idea conversion: It’s one thing to generate ideas, but if they are not converted into products (or features or services) they will not benefit the organization.
  3. Idea diffusion: Once ideas have been examined and developed, they still need to receive buy-in (both from within and without the organization).

The following table shows critical tasks managers must do to successfully turn ideas into products customers want to buy:

The Innovation Value Chain

The Innovation Value Chain

Subsequent posts will focus on each phase in more detail, what happens when one or more of the phases is neglected, and how organizations can fix problems in any stage.

The Product Management Perspective: Product managers play a key role in gathering ideas, converting them into products and distributing them to their markets. The more they focus on proven processes to guide them, the more predictable will be their success. It’s critical that product managers not only understand the theory behind innovation but also understand how to implement it.


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Great ideas

The Leadership and Success section of Investors Business Daily provides an excellent source of ideas and information for leaders. One of its highlights is the IBD’s 10 Secrets to Success section, a short article about one of  ten traits they have identified in successful people from all walks of life.

In today’s edition of IBD, Adelia Cellini Linecker writes about what it takes to make great ideas happen (the full article is available on Yahoo! Finance). “Great business ideas are seldom hatched in a boardroom. Blockbuster products are born when you hit the pavement and see firsthand what people need and want.” The ideas for this article come from the book Tuned In. Adelia identifies six actions to help you get tuned in to what people want:

  • Find openings
  • Study
  • Understand buyers
  • Create experiences
  • Communicate
  • Connect.

Phil Myers, co-author of Tuned In, stresses the need to to find market problems first, then decide which solutions customers will pay for. This approach leads to success. He says: “Be consistent about observing what’s going on in the marketplace; talk to people who may … have an inkling that they can be your customer.” Find a way to solve their problems and they will gladly pay you for it.

The Product Management Perspective: Great ideas, that turn into great products and even businesses, come from a deep understanding of the market. Product managers play a strategic role in identifying market needs and developing the ideas into product definitions. Working with their teams, they create products that people will gladly pay money to have.