Product concepts are the lifeblood of your company. Flowing through your company’s system, like blood through the veins of a human body, new product concepts are the future of your company’s health and the source of its growth. Unfortunately, many companies lack a strategic planning process for innovation, or they manage it poorly. Too many companies insist that the early stages of innovation – when your idea may be no more than a drawing on a napkin – cannot be managed. What too many company’s lack is a strategic planning process that helps to identify winners, to reduce risk, and to manage investments in the early stages of development.
An overall front end process governs early-stage concepts that may or may not lead to a new product. It manages technology development and market exploration, while outlining the cross functional steps and roles proper to pre-development activities. Such a process also defines the relationship between planning efforts including strategy, roadmapping, capabilities, and budgeting.
A successful front-end process:
- Improves oversight of pre-development activities
- Ensures roadmaps are aligned with strategy
- Results in a budget and priorities aligned with strategy
We recommend a two-tiered approach to the early stages of innovation. It includes 1) an annual review tied with the budget cycle, and a 2) lightweight, day-to-day process to manage early-stage product concepts, until they reach a stage of maturity where they are approved or rejected. The front end process then ushers products that make the cut into the pipeline.
Starts With a Vision
But how can companies begin to make decisions about concepts that are necessarily ill-defined and nebulous, as are all products before they’re realized? They make these decisions based on their vision, strategy and existing roadmaps. But first companies must have a vision, an aspiration that is like a north star, guiding explorers to new discoveries, while ensuring they can bring their innovations back home.
A vision is a long-term and easily communicated summary of the aspirations of the business. It needs to be simple enough that anyone can quickly read and understand it. Its aim is to give all employees a sense of direction and purpose, and to anchor the strategy in larger goals. Update the vision every three to five years or when there is a major business shift.
Build a Strategy
The strategy is a comprehensive living document, that illustrates the vision and translates it into measurable initiatives. It ties together finance, operations, sales, human capital and technology. It is communicated throughout the organization. A well-formed strategy helps managers make efficient choices and builds confidence in the future.
At the Division Level, the strategy is a plan, revised annually, that guides the organization toward achievable goals. It defines markets, customers, and the business you are in. It also captures the key marketing messages and unique selling propositions.
It usually also includes:
- Division business strategy
- Growth strategy
- Product strategy
- Product team strategies
Developing a Portfolio of Early-Stage Concepts
Think of early stage concepts as a portfolio of assets, that each represent a different potential value to your company. Some of these concepts are probably worth little or nothing. Others may be the next blockbuster, the Holy Grail, the Concept That Changes Everything.
The Product Portfolio is a snapshot of the product portion of the strategy, that describes an array of potential solutions, along a risk/reward spectrum. It allows executives to ensure that their new product ‘bets’ are aligned with the product team’s strategy. It enables companies to control the initiation of new product activities, and makes the delivery of winning new products more reliable.
Portfolio views may include a concept portfolio, a technical portfolio, a development portfolio, etc. However you choose to display this information, your product portfolio should define the problems and solutions related to the proposed product. It also helps to define the relative allocation of R&D towards product teams. Having a clearly modeled product portfolio helps a company create the right balance between incremental, derivative, and platform projects.
Create a Roadmap
The next step is to create roadmaps that indicate where the organization is headed and how, over time, it intends to execute the strategy. A roadmap is a timeline showing related markets, products, capabilities and technologies. It shows how each of these elements tie together over a defined time horizon.
Roadmaps direct IP Strategy, M&A Strategy, and talent acquisition. They also define make/buy strategy, and direct product marketing, and product planning. Typically, a company will create several roadmaps showing, for example, three discrete, linked timelines for technologies, markets, and products, looking forward over a five-year period.
A Big Picture That Clarifies Decision-Making
When it comes to early-stage development, companies often fail to see the bigger picture. New ideas crop up at every level of the organization, from the senior team, to a manufacturer on the shop floor, but many companies do not have a reliable way to capture these ideas, and make plans around the best of them. They have little context for managing these fragile potential offerings, because they are focused on the fire they need to extinguish today and not on the new idea that will break the mold in three years.
Having a two-step process that guides executives to think about future products on an annual basis, with a clear set of steps to manage the day-to-day decisions around developing new ideas, is a good start. Building a broader context, defined by a clear vision with a strategy to implement it, gets everyone invested in new ideas. Having a portfolio view that shows where your new ideas stand at the moment, and roadmaps, that show the dependencies between technologies and products, clarifies the front end of development, reducing risk and improving product selection.
Image credit: Pixabay
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John Carter has been a widely respected adviser to technology firms over his career. John is the author of Innovate Products Faster: Graphical Tools for Accelerating Product Development. As Founder and Principal of TCGen Inc., he has advised some of the most revered technology firms in the world.