A Heuristic Framework: Innovation Success Can Be Shaped From the Beginning, One Question at a Time

Question  mark of puzzle piecesWe often make innovation more complicated than it needs to be, analyzing everything only to miss the critical factor that would lead to success. Companies invest tens of millions of dollars and countless hours of time only to find they have missed the mark. Afterward, they wonder how they could have overlooked the one or two things that clearly would have made a difference between the success and failure of an innovation effort.

Innovation is legitimately hard to predict. But there must be a way to gain a clearer picture of an unknown future. Based on in-depth studies of 20 innovation stories — including both successes and failures — this article proposes a six-question heuristic framework (shown in the sidebar at the end) that helps companies gain a clearer picture upfront of what factors they must consider to make their innovation efforts successful.

By using this framework, companies can assess their innovation efforts in a way that allows them to focus their efforts in the right places, avoid oversights, and increase their chances of success.

It sounds simple — but the simplicity of the framework is its strength. The questions are not meant to be answered through extensive research or in-depth analysis of existing data.

Rather, this is a heuristic that can help make smart choices quickly, by applying minimal information within the context of the environment in which the innovation would take place.

It should also be noted that the framework is not a way to measure or otherwise determine success — the questions and their possible answers are not meant to be used as a tool for making “go-no go” decisions about innovation efforts. Rather, the very act of asking the questions is valuable, because the process allows you to look at an idea from different angles and fill in the contours of unknowns.

We’d argue that the early focus of an innovation effort should be on working this framework — and the subsequent questioning, testing, and measuring to which the framework questions might lead you — in order to make sure you understand the critical success factors for your innovation effort.

While the framework’s questions are not hierarchical, they should be worked through in the order they appear. This will result in a logical flow in how the subsequent picture comes together that will make it easier to understand.

Question #1: How well does this innovation effort fit the current organization?

“Fit” is a tricky question to answer, especially early on. A question about fit often is used as a go-no go checkpoint to boot out innovation efforts — sometimes incorrectly so — which might result in products that are too “different,” or perhaps are outside the organization’s core.

Neither of these is a reason in and of itself not to pursue an innovation. In fact, many disruptions do not “fit” — that’s one of the things that make them disruptive.

Yet, a consideration of fit offers a great deal of useful information on how to proceed, when it’s used as a means of identifying the fact that a particular innovation might pose challenges because it is somewhat foreign to an organization.

The challenge here is to visualize in what ways fit issues might determine or affect a successful course for your innovation.

One senior executive we interviewed recounted that her predominantly print advertising company attempted to introduce Internet-based advertising using its traditional sales channels. The company leadership was anxious to launch the product in order to position its Internet division as a potential spinoff and to significantly impact Wall Street’s perception of company valuation.

However, discussions that she had with senior management about the incongruity of selling Internet-based advertising via a sales force trained in print media “…fell on uninterested ears.” As a result, the new product fell far short of its performance objectives.

Had the company acknowledged this potential misfit, plans could have been made to create a new distribution channel for the product, or perhaps to modify the product in such a way as to be more familiar to the sales organization.

As you work through the framework, it’s important to remain open to further questions suggested by the investigation. These are some of the further questions that you might consider here:

  • Would the innovation leverage our core competencies, or require us to develop other capabilities?
  • How well does the innovation align with our mission and vision?
  • Will our current organizational structure support the innovation, or would a different model be more effective?
  • Will the company’s culture support the innovation, or will there need to be change?
  • Is the company prepared to move in the direction that the innovation might take it?

 

Question #2: What degree of strategic advantage does this innovation effort provide?

This question can reveal potential conflict between the benefits of an innovation and the volume of resources needed to execute and sustain it. The challenge at this point is to identify where you might encounter resistance stemming from a perceived imbalance in the work-reward ratio.

Innovations that provide a clear strategic advantage not only stand a good chance of being successful, but as a side benefit, they can generate an esprit de corps within the company, as evidenced by a story from the financial services industry.

A major credit-card company was experiencing a decline in the growth of its core product user base and wanted to reverse that trend. The company hit a home run with an innovative program that rewarded card members for dining at restaurants.

The program generated an increase in spending by card members, and the uniqueness of the offering both promoted loyalty and discouraged customers from using other credit cards to make their purchases.

According to the executive who oversaw the project, “It was embraced by all levels and departments in the company….The sales department really loved it because it was a new program they could offer to their customers. Finance and senior management really loved it because we made money from the member restaurants and from our customer base. The internal agency loved it because everything was new [and] they could come up with new ground-breaking collateral. Everyone loved it.”

Further questions that can be asked here might be:

  • Will the benefits of the innovation be long-term or short-term in nature?
  • How might the innovation impact the competitive landscape?
  • How quickly can our competitors copy what we’re doing?
  • How might it affect our customer base?
  • To what degree might the innovation create “option value”?
  • Is this something we have to do, regardless of cost?

 

Question #3: How well does this innovation satisfy customer jobs-to-be-done?

This question sheds light on the potential demand for the innovation. The challenge here is to visualize in what ways customer demand might affect a successful outcome for your innovation.

A hospitality-industry executive’s company had undertaken several customer research studies asking what new functionality should be in its commercial kitchen product; yet in spite of several resulting enhancements, the company was seeing virtually no change in its market share.

The company decided to take a more holistic approach. They began asking customers, “What is your biggest concern when it comes to running your business?”, to which their customers answered, “Food safety.”

The company then incorporated an anti-microbial agent into its products to prevent the bacteria growth, thus reducing the risk of food contamination. As a result, it saw a significant increase in market share and was able to capture a large strategic account from a primary competitor.

Further questions that can be asked here might be:

  • Does the innovation address an overt need, or something that has yet to be recognized?
  • Will the innovation address an underserved market?
  • Is it an “up-market” innovation?
  • Will the innovation require a shift in customer beliefs and/or behavior?
  • What might the adoption curve look like?
  • How long are we willing to wait for results?

 

Question #4: How might we pursue this innovation?

This question is designed to focus your thinking on the various implementation paths available and the potential challenges associated with each path.

Admittedly, this could be a particularly difficult question to actually answer at this stage. Again, the value is in the process of thinking through the answer, and the questions that this process raises.

A technology company that manufactured computers set up a new company to pursue an innovative product idea that lay outside their business model — a component that consumers would install in the computers themselves. Several entrepreneurial employees took the new idea to form the spinoff company.

Not only was the new company successful, it was eventually “spun back in” to the parent company. Also, due to the success of the partnership between the spinoff and its Japanese manufacturer, that company also became the parent company’s manufacturer as well — a relationship that lasted more than 15 years.

Further questions that can be asked here might be:

  • Do we have the ability to build the innovation ourselves?
  • What legal and intellectual property issues might be associated with this innovation?
  • What sustainability issues do we think there might be?
  • Are there any potential partners out there?
  • How quickly do we need to execute this innovation?
  • Are we willing to share rewards with a partner?

 

Question #5: How clear is the definition of success for this innovation?

Although it would seem this question would be easy to answer, often it is not. While revenue, net market contribution, and cost reduction might provide clear objectives for existing products and services, it might not be appropriate to evaluate an innovation using those same metrics.

For one innovation, simply moving from design to launch could be deemed a success; for another, customer satisfaction could be the yardstick by which it is measured. The critical challenge here is to consider in what ways success metrics might in and of themselves determine a successful course for your innovation.

A UK food company executive told us of his company’s foray into a partnership to manufacture a new, good-tasting, low-calorie, refrigerated, ready-made pizza that would be co-branded with a “slimming club” (the UK version of a group such as Weight Watchers).

The project proceeded to a launch, and then was killed after it became clear that, due to the co-brand deal and pricing pressures, margins for the product would not exceed 25 percent. The company, which had never before done any co-branded products, was accustomed to 45 percent margins on private-label food products.

The slimming club promptly found another partner to make a co-branded product, which significantly ate into the market share of its former partner’s competing private-label product.

The result was that the company received 45 percent margins on a smaller market share, and wasted a fair amount of product development and launch time, effort, and money into the bargain. Had the profit expectation been understood earlier, the company could have shelved the idea or investigated the potential consequences and perhaps tweaked either expectations or product.

Further questions that can be asked here might be:

  • Is the reason we are undertaking this innovation reflected in the definition of success?
  • How might we measure this innovation’s value?
  • Do we use our current metrics and measurements?
  • Do we need to create new metrics?
  • How will those charged with implementing this innovation be measured?

 

Question #6: How readily will management support this innovation effort?

Even in the most supportive cultures, innovation is a challenge. This question is designed to surface possible contradictions and tensions that could negatively impact the implementation of the innovation effort. This may be the place where it’s clearest that considering the question will help determine the course of the innovation.

An executive in the quick-serve restaurant industry shared a very painful innovation story in which her company spent huge amounts of money identifying an area of opportunity along with a unique solution to fill the void, only to find out that the senior leadership team would not support the innovation.

As a result, the executive changed the innovation process to enhance her chances for future success. Now, she said, “I get my CMO and my VP Marketing to read the ideation brief and sign off that they agree… I get all the dirt out up front and all the rules out up front.”

Further questions that can be asked here might be:

  • Why might there be resistance to this innovation?
  • Why would there be support for this innovation?
  • What kind of communication needs to take place?
  • Who should I leverage as innovation supporters?
  • Is it worth the effort to gain more support for this innovation?
  • What needs to be done to gain support?

 

Conclusion

How could something this basic hold the key to successful implementation of an innovation? The answer is basic as well: because it is common for an innovation to be derailed because of a simple oversight, such as not recognizing that a company’s standard performance metrics might not apply to an innovation effort if it is different from any past undertaking.

Also, it is possible that asking simple questions such as these could make it possible for a company to successfully execute a completely unfamiliar innovation, because it focuses attention on very basic but important issues along the way.

We think that the knowledge gained from applying this framework is worth much more than the small amount of time required to do it — especially in cases where it exposes problems that could be corrected early in the process much less expensively and more easily than they could be corrected later.

And in worst-case scenarios, the knowledge gained from the application of the framework could illuminate certain failure—and that, too, is better understood before significant resources are committed to a project.

Renee Hopkins is Senior Editor at Texas Enterprise; Gwen Smith Ishmael is senior vice president, Insights and Innovation, at Decision Analyst. They are co-leaders of Innochat. This article was originally published in Strategy & Innovation.

 

Sidebar: A Heuristic Framework for Corporate Innovation

Question #1: How well does this innovation effort fit the current organization?

  • It fits very well.
  • It fits somewhat well.
  • It does not fit well.

Question #2: What degree of strategic advantage does this innovation effort provide?

  • It offers a high degree of strategic advantage.
  • It offers a medium degree of strategic advantage.
  • It offers a low degree of strategic advantage.

Question #3: How well does this innovation satisfy customer jobs-to-be-done?

  • It offers a high potential satisfaction of customer jobs-to-be-done.
  • It offers a medium potential satisfaction of customer jobs-to-be-done.
  • It offers a low potential satisfaction of customer jobs-to-be-done.

Question #4: How might we pursue this innovation?

  • We might build internally.
  • We might collaborate with others.
  • We might build or acquire the necessary capabilities.

Question #5: How clear is the definition of success for this innovation?

  • The definition of success is very clear.
  • The definition of success is somewhat clear.
  • The definition of success is not clear at all.

Question #6: How readily will management support this innovation effort?

  • Management will very readily support this innovation.
  • Management will somewhat readily support this innovation.
  • Management will not at all readily support this innovation.
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