The goal of every company and product leader is to invent products (or services) that become recognized market leaders. Creating a new product category is icing on the cake, but also rare and extremely difficult.
We all know about companies and products like VMware, Google, and Uber that have not only developed cool products, but also fashioned new life-changing industries. Thinking about it from that perspective might cause us to shrink and say, “I could never do that.” However, there are many lesser-known companies and products that lead their markets; and done right, creating new markets and categories is well within our grasp.
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My last post discussed The Innovation Value Chain, a sequential process that involves idea generation, idea development and the diffusion of developed concepts. When organizations give proper attention to each step they develop ideas into great products and services, which leads to great companies.
What happens when one or more steps in the process are neglected or omitted? Here’s what the authors say: “A company’s capacity to innovate is only as good as the weakest link in its innovation value chain.” Organizations typically fall into one of three “weakest link” scenarios:
- Idea-poor company: These companies do not cultivate new ideas from within the company and do not bring in enough good ideas from external sources. They spend a lot of time developing mediocre ideas that result in sub-par products and financial returns.
- Conversion-poor company: In many cases conversion-poor companies have many good ideas, but the “leaders” in the company do not screen or develop ideas properly. Great ideas often die in the budget process due to fear of the unknown. Managers hesitate to take risks and instead emphasize the incremental and certain, not the novel.
- Diffusion-poor company: These companies have a difficult time monetizing good ideas. They often suffer from the “not invented here” thinking. As a result, new products and services are not properly rolled out to the market. They milk the cash cow instead of paying further attention to idea generation or idea conversion.
Do any of these scenarios sound familiar? The article provides a survey that asks 13 questions, which helps identify area(s) where an organization struggles (the “weakest link”). Higher scores indicate areas of weakness. Identifying the weak links will help your organization focus on high-impact changes that will improve the conversion of ideas into great products and services. (Unfortunately the Harvard Business Review does not make their survey available online. Contact me directly for more information about the survey.)
The next few posts will explore how organizations fix each “weakest link” scenario.
The Product Management Perspective: The role of product management touches every aspect of the innovation value chain. Alert product managers work with their teams to bring about good ideas and turn them into successful products.