“No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

-Steve Jobs

 

This article is not specifically about cloud computing technology, but about the insights it has spawned… However, for anyone that is interested, my cloud computing solution comparison notes are here; I also recommend Above the Clouds: A Berkeley View of Cloud Computing.

As I studied and researched cloud computing solutions from Google, Amazon and Microsoft, I came to realize how much of corporate personality spills into our technological creations, you could say we create in our image… One could argue, this is all about branding. And, as a Buddhist principle states that all views are empty of inherent existence, I would not argue: views rather depend on who is looking, and when, and for what purpose. However, I see branding as a conscious and explicit activity, while our process of creation is unconscious representative of our true-selves.

As I was reading Ackoff’s The Art of Problem Solving: Accompanied by Ackoff’s Fables, I had a humorous insight into the personality of Google, Amazon and Microsoft. Ackoff indicated that the philosophers of ancient Greece divided the pursuits of man into four major categories:

1. The scientific: the pursuit of truth;
2. The political-economic: the pursuit of power and plenty;
3. The ethical-moral: the pursuit of goodness and virtue;
4. The aesthetic: the pursuit of beauty;

Other than my obvious oversimplification, here is what I noticed as I was pondering over my notes…

Amazon Web Services (AWS)

Amazon has put together perhaps the most comprehensive and mature set of services. As their solutions are easy to comprehend and most portable from the development and deployment perspective, they should appeal to the IT-minded folks. Initially what has started as an infrastructure (IaaS) approach is now progressing towards platform solution (PaaS). Leveraging their core competency of operational excellence, Amazon has given the control to its customers, including the management of data and application deployment locations around the world.

With all that, Amazon is utilizing the pay-as-you-go service. Though this is certainly appealing, looking through the pricing terms felt like I would be nickeled and dimed even IF I really paid attention to my application design… (Note that the need to design-for-the-cloud applies to all cloud computing technologies in general.) With that, I place Amazon on the pursuit of the power and plenty column.

Google AppEngine

With the motto of do no evil, Google automatically moves to the category of pursuing goodness and virtue. Google’s AppEngine approach is in complete support of this pursuit, working to deliver cloud computing vision to anybody with as little effort as possible. Using a platform approach (PaaS), Google delivers automatic self-healing, self-scaling applications. All one has to do is to develop within the Google’s framework, follow their best practices, and everything else will be handled auto-magically.

Following Google’s tradition of giving away large quotas, AppEngine is also free up to a certain level of usage per-day. In addition, the developers can set daily budgets where Google Checkout is available. Pricing as well as the development environment would attract startups and Open Source community, which would continue to give more goodness back to the Google’s ecosystem. However, the customers’ lack of control over the infrastructure can challenge and raise further concerns for privacy and security in the cloud (see Forrester’s Interactive Data Protection Heat Map.)

Microsoft Windows Azure

In typical Microsoft fashion, the Windows Azure platform has something for everyone, including a flat-rate pricing structure. Designed as a platform approach (PaaS) with the possibility to provide infrastructure control (IaaS) in the future, Azure is a hybrid-cloud focus bridging enterprise and the cloud. Windows Azure also introduces a different development approach to cloud computing with the concept of Web roles and Worker roles to support auto-scaling via software. In order to encourage adoption and lure developers, Azure supports whatever programming language you want to use, from .NET to Java to Python.

Though one may question, it feels like Microsoft is in the pursuit of truth with what seems like constant drive to redo/rewrite/re-architect/re-invent, while solving everyone’s problems and converting them to their platform. Borrowing from Karl Marx’s argument, are they the opiate of the people?

If Apple was in the ring, and there are rumors of future Apple cloud computing services, I would classify them as the pursuit of beauty. Just think, the most beautiful, completely controlled cloud-based AppStore that brings the elegance of Apple products to the clouds.

“In the process of developing an accurate assessment of who you actually are, you need to appreciate the disparity between how you appear to your own mind and how you indeed exist.”

–Dalai Lama

As I mentioned earlier, I am oversimplifying… However, every aspect of what we create (packing, documentation, web site design, technology philosophy, …) reflects on our personality and attracts customers accordingly. In reality, we don’t stop there, as businesses also attract and hire people like themselves. Which creates the cycle of similarity: similar products, similar feature sets, similar customers, similar thinking, similar mistakes, … No wonder many established firms struggle with innovation!

With that said, I believe this process, this behavior is normal. It is human nature. Given that the process of change is hard, instead we can seek to better understand the world that we operate in and design accordingly. Recently I read an article in the Building Design Strategy: Using Design to Achieve Key Business Objectives book: Design Strategies for Technology Adoption. The authors outlined six generic design strategies to drive technology adoption: endorse, curate, integrate, economize, play, refresh. Here is a synopsis of the article:

Innovation is one thing; success in the marketplace, quite another. Alonzo Canada, Pete Mortensen, and Dev Patnaik offer a framework in which design becomes the channel for uniting these two realities. Identifying five clusters of users – innovators, early adopters, early majority, late majority, and laggards – and numerous hands-on examples, this trio of authors advocates tailoring designs to the priorities of each group.

Understanding the technology adoption and diffusion process is critical for every entrepreneur. Cloud computing takes this further in the sense that, it extends beyond immediate customers to those customers’ customers for its adoption. Using a methodology like this to analyze technology adoption early on in the development process can bring balance to our natural human tendencies for developing products for ourselves. For cloud computing, thought process might go something like this:

• endorse (cater to innovators) Focused mainly on communicating the benefits and advantages of a given technology, cloud computing already passed this stage. Just check out Apps.Gov!
• curate (cater to early adopters) Focused on the early adopters, this stage is like targeted, 1:1 marketing that emphasizes key desirable benefits, functionality and return on investment for that early adopter. I would say cloud computing is at this stage, where every cloud computing vendor is marketing their differentiation to attract customers. The specific features currently includes the ease of building self-scaling applications or introducing tools and services for automatic scalability, and hybrid-cloud approach of bridging private and public clouds.
• integrate (cater to early majority) This stage is focused on attracting mainstream users, who are looking for solutions that work without compromises. What does this mean for cloud computing?! With sites like Apps.Gov, many end users who are late adopters, laggers and mainstreams will be adopting cloud computing. With that, the cloud computing technology feature set needs to satisfy both the developers and their end-customers. This includes improvement in the areas of security, privacy, governance (ability to set policies and monitor), performance and SLAs (Service Level Agreements), along with end user specific requirements, such as simplifying synchronization on and off the cloud, ease of content access across devices and platforms, reliability, trust, and of course performance.
• economize (cater to late majority) In the technology adoption curve, this stage is all about cost-reduction and commoditization. Recently Amazon launched EC2 Spot Instances, where customers can bid for the unused computing capacity and have access to resources as long as their bid exceeds the current Spot Price. Just think, global CloudExchange! To enable this level of ubiquity, we need cloud standards to drive interoperability and interconnectedness between clouds at a global level.
• play (cater to laggards) Laggars lag everyone in the adoption curve… The authors recommend making the familiar unfamiliar in order to appeal to laggards, where the motivation is not about technology. Similar to the VoIP’s entrance into the home as a bundled package with cable for voice data, cloud computing could shape into services and products that could appeal to laggards, such as TiVo-on-the-clouds.
• refresh (cater to new markets) Once cloud computing reaches its vision of computing as a basic utility delivered over the internet, what is next? How could the cloud computing vendors refresh and open up new markets? Maybe Amazon should start the Computing Affiliate Program to enable individuals to feed computing resources into the grid, just like solar into a power grid to add extra capacity.

As Drucker indicated, innovation is an effect in economy and society; it is a change in behavior of customers, in how they work and produce something (Innovation Process: 3 Things You Can Count On.) Using frameworks such as technology diffusion process and designing strategies to drive technology adoption, we can gain the needed insight and understanding to accelerate and enable the cloud as a globally ubiquitous computing utility delivered over the internet.

Technorati Tags: cloud computing, technology adoption, design strategies for technology adoption

From Fast Company‘s Think.Design blog by Ken Musgrave:

• The Enduring Power of Brand: Leica vs. Panasonic — Power of emotional connection
• Beyond Design, 10 Skills Designers Need to Succeed Now — This list is not just limited to designers

From MIT Sloan Management Review‘s special report on Design Thinking:

• Problem Solving: How to Become a Better Manager… By Thinking Like a Designer by Jimmy Guterman —  Interview with Nancy Duarte and Garr Reynolds. If you are thinking this is not relevant, look again. Here is a quick snapshot from Garr Reynolds: embrace restraints; take a risk; question everything; it’s not about tools.
• Designing Waits that Work by Donald Norman — A few tips on how to apply design thinking in your day to day people management.

From Core77, Parallel Universes: Making Do and Getting By + Thoughtless Acts (Mapping the quotidian from two perspectives) by Kevin Henry — information exists already in the world; great precision is not required; natural constraints are present; cultural constraints are present.

Technorati Tags: design thinking

Note: This article is written from the perspective of technology development and leading R&D teams.

Developing technology is a relatively simple task when compared to the challenge of getting it diffused and adopted throughout the intended ecosystem. Although there are others, understanding customer needs, wants and overall psychology is one of the big hurdles that has to be overcome for success. This journey starts at home with your Customer Support team. Yet, there tends to be a gap between R&D and Customer Support teams during the innovation process. Here are my experiences on where the gaps can occur and strategies that worked for me for closing (or, when needed, widening) them.

Prioritize Customer Support correctly

On the road to your product release, you may be tempted to prioritize Customer Support behind everything else. After all, what could be more important than schedule, cost, functionality, … Believe me, it will happen, I have been there. And everyone in the program team will agree to that prioritization…. However, for new products and innovations, it is the wrong decision. Innovation is about change. Your Customer Support team is there to help your customers manage that change effectively. By prioritizing Customer Support low, you are under valuing the role that they play in supporting and hand holding the users of your products.

Unfortunately the implications of this decision could go deeper than just a damaged relationship between two teams. If the Customer Support team does not have the knowledge to support your products, continuous customer escalations could impact your team’s morale, damage the product’s reputation, and impact schedules as resources are pulled to address various issues. So, perform a risk analysis of your product, and evaluate how challenging it may be for your customers. As optimistic as you are, remember Murphy will be there.

Get to know your extended family

Whether you call them partners or customers, customer support, field engineers, and your sales team are all part of your extended family and, in loose terms, are customers of R&D. They sit between you and your end-customer, managing the day to day relationship, activities and issues. If they don’t believe in your solution and your vision, they will not be able to sell it either.

Take your time. Get to know these partners. Learn to speak their language. Learn how to make them your eager customers, your cheerleaders. Definitely share the power and beauty of your technology and product. However, be ready to do that from their perspective using their language and reflecting on their experiences. Where possible, be ready to walk a mile in their shoes. Be prepared to learn a lot about your end customer through these experiences.

First impressions count

I have been a WordPress user and administrator since I started this site. Over the last few years, the WordPress team have done amazing work to improve the overall administrator experience during upgrades and infrastructure updates. Deployment, installation, upgrades and migrations may not sound sexy, but they go deep into your technology, product and architecture strategy. They also play into first impressions. Compare that to my Microsoft experience, where after 15 minutes of validating, acknowledging and thanking me for having a valid copy of Microsoft XP, the next product that they suggested I install started the exactly same cycle…….. Btw, did you catch Apple’s announcement on Mac OS X Snow Leopard: refined from installation to shutdown. First impressions count!

Make it timely

Documentation seems to be the arch-nemesis of technology developers. Yet, it is one of the time tested methods of knowledge transfer, especially in large corporations and virtual teams. Lack of documentation and support can make or break deals. Recently, I took a 3 week detour as I evaluated using Zope for a prototype idea. After giving my full attention, and trying to work around all the “lack of’s” (lack of working sample code, lack of newbie documentation, lack of knowledge on what functionality maps to which release version…) I moved on to Django. The difference is like night and day.

Knowledge transfer is one of those challenging areas that requires work. It doesn’t happen by itself! So, set up a methodology that makes sense for all parties involved. Establish a process to ensure right knowledge is being captured and communicated in the intended way. It can be as simple as an email snippet, a brown-bag discussion, or as formal as a documentation library managed by a volunteer librarian; i.e. an R&D engineer. Either way, make it work and make it timely.

Move in together

Good customer experience is key to your success. Achieving this can be quite a challenge during the early days of your product and technology. Sometimes you may need to ship your products with dedicated engineers, other times it might make sense to move in with Customer Support to ensure timely customer resolution and effective knowledge transfer. Some of my fond memories are from the time when I moved into a Customer Support team on a temporary assignment. I was leading a small, hand picked R&D team with the task to transition our technology and product knowledge to Customer Support.

This may sound extreme, however if the situation demands, it is the quickest way to turn things around, rebuild damaged relationships and gain internal support for your product and technology. It is important to note that if you are building a transition team, you need to ensure that:

1. You select bright and knowledgeable engineers from the actual pain points; i.e. where customers have issues.
2. You select at least 2 engineers with personality and style (and the ability to stay calm under the most stressful situations) to effectively interface with internal and external customers.
3. Individuals on your team must have good relationships with bigger R&D team, and willingly share their learnings with all.
4. At least a small percentage of the team must work full time to ensure successful transition of knowledge.

Managing the timing, goals and milestones of the transition team is crucial. You cannot afford to be there indefinitely. It is not good for either party. So, set goals and expectations on both sides and be ready to pull the plug if people are not pulling their weight. Needless to say, at the time I wasn’t the most popular person in the R&D organization, but through the work of the transition team we built internal support and established a shared vision.

Immerse yourself in their language

Sometimes closing the gap between R&D and Customer Support might require everyone on the R&D team to become part of Customer Support. Though this may not be the most efficient solution (and also not the most popular), establishing a rotation for R&D escalation support will ensure everyone in your team experiences the challenges and issues that Customer Support sees. If you do choose to go this route, make sure to dedicate an accountable resource to make sense of the constant change; in my case my QA Manager was responsible for managing the rotation.

Though it was painful at times, this process did help my R&D team to have a better understanding of:

1. How our customers were using our products;
2. What major issues our customers were seeing and why;
3. An insight into how the overall product worked (vs. just focusing on their own silos);
4. Building a one-to-one relationships with Customer Support;
5. Ultimately building a better product and technology platform.

In conclusion

Through experience, one can learn a lot about what not to do…. Innovation is a system, and it needs to be managed as such.

Technorati Tags: Customer Support, innovation customer gaps, knowledge transfer

1. Strategy 101: Revisiting low-cost leadership with Dell
2. How to identify forces impacting your innovation
3. Metrics gone bad and steps to recovery
4. Good, bad and ugly: Organizational silos
5. Best practices: SWOT analysis revisited
6. Strategy 101: What is your core competency?
7. Effective strategies for surviving culture tax
8. Create value at every touch point
9. Strategy 101: Characteristics of disruptive technologies — Wii has bad graphics!
10. Intrapreneurs: Navigate the corporate maze for innovation

The Six Most Common Approaches To Innovation. Tell Me Which One Works For Best For You?

Idris Mootee highlights the 6 most common approaches to innovation. As I think about my past experiences, even within the same organization, I utilized different innovation approaches based on the changing problems and context. And, I would agree that ‘Throw-Plenty-Of-Ideas-Around‘ is my least favorite method. In some cases, combining one or more of these approaches could further focus your innovation process, such as refining the killer idea by prioritizing problems.

• Find-New-Ideas-To-Power-Up-Growth-Strategy
• Find-Customer Needs-First 
• Find-A-Killer-Idea-First
• Throw-Plenty-Of-Ideas-Around
• Define-The-Problem-First
• Hide-In-The-Dark

“Sustainability” Has More Than It Means. There Are No “Sustainability” Without “Social Innovation”. Many Of The Solutions We Have Are Simply Too Tactical, Not Dealing With The Systemic Issues.

In this blog, Mootee tackles the challenge of defining sustainability. You can also read my ramblings on this topic: There is more to sustainability that just being green.

“The first problem I have with is the narrow definition of sustainability. …

If all of this sounds not confusing enough, there’s more. It is basically a humanity issue more than an environmental issue. We are not seeing the whole if we only see environment. How do we provide a decent life on this planet is a problem facing all humanity? Well I am making the problem too difficult to solve. This is a wicked problem; it is both systemic and maybe the ultimate challenge.”

– Idris Mootee, Innovation Playground

Hopefully these personal insights will help anyone in need for little strategy to successfully maneuver around the blockades in the system. Please share your own strategy and insights on what works for you.

Recognize that a small step can create giant leaps

As I mentioned before in Small steps… Big leaps, with every small step and by using tipping point leadership principles, we can all create giant leaps. Innovation comes in different shapes and sizes. It is a multidimensional concept where the innovation can happen in varying dimensions and degrees: technology, process, product, service, business model, value-delivery, brand, design, quality, culture, market, customer/segment, … So, start small. Choose an area that you not only care about, but one in which you can also be successful: success breeds success. If things don’t go as well, practice resilience, take your learnings and start again.

Know your influence circle

Perhaps the best discussion of this topic is given by Stephen Covey in The 7 Habits of Highly Effective People. Covey discusses the concept of circle of concern and circle of influence, and emphasizes that by focusing on what people can control, they empower themselves to influence and change circumstances. I have seen brilliant people dwell on things that they have no control over, nor should even matter. Unfortunately, this habit is nothing but a distraction from what really matters, and wastes energy on what one cannot change.

God grant me the serenity

To accept the things I cannot change;

Courage to change the things I can;

And wisdom to know the difference.

– Serenity Prayer

Working with a mentor can help focus your energy and provide insights on how you can increase your influence circle. You can also take this to the next level by identifying each of the core areas that you are interested in vs. what you can control or influence in each of those areas. Using a simple radar graph, you can quickly identify gaps and develop an action plan.

Increasing your influence circle may not be a simple task, especially if you are dealing with existing perceptions. However, you can:

• Start small: success breeds success.
• Take visible accountability and responsibility on areas you control.
• Demonstrate creative thinking and problem solving.
• Step up and be visibly engaged.
• Recognize that Rome wasn’t built in one day. Practice patience and mindfulness.
• Develop your intuition and stay connected to other’s motivations, goals and objectives. Help them be successful.
• Deliver results and stay ahead of the pack.

Know your boss

Just like innovations, bosses come in every shape and size. In general your success and their success is intermingled (though this is not always the case). Good communication is crucial to understanding  their influence circle, their goals and values, concerns and motivations, styles and risk profiles, openness to cooperation… Basically anything that matters when it comes to managing change, as innovation is change!

Perhaps the biggest challenge is when there is a value clash between you and your boss. This is where your instinct and intuition can support you. I once worked for a manager that didn’t believe in inter-organizational cooperation, which didn’t align with my core values. Through utilizing good risk management process along with clear roadmap and understanding of roles and responsibilities, I worked around the issue. However, realize that, even if it turns out to be the biggest success, you will not necessarily get the credit or appreciation. So, don’t ask for it. Don’t expect it, as you are doing it for yourself by being true to yourself.

Hitch a ride with corporate wide strategy

You might have one of those corporate-wide initiatives that every individual in the company could recite in their sleep. These initiatives could certainly be useful as a platform for justifying as well as finding support for your ideas. Unfortunately many of these initiatives just stay at the surface and do not carry weight in the organization. So, take it for what it is,  plan your strategy around it while making it work for you.

Test drive your concepts and ideas

Establish a small group of diverse individuals that you can test drive your concepts with that you trust. Ideally a group that can represent diverse views from technology, product, business and customer perspective, and can help you polish and enhance your pitch. For more on this, see my previous article: Meet your idea critics.

Work on your communication and presentation

How well you communicate and present your ideas is your key to success. So, work on it. Through your discussions with others, build your communication deck and keep refining it.

Remember, the success of your execution is dependent on people: your team, your firm as well as the larger ecosystem of suppliers, service providers, labor unions, partners, … Transparency in your communication will help build trust and openness.

Murphy does live with you

Enough said! Risk manage! When they cancel the project, don’t take it personally. Take your learnings and move on. Realize that there are anti-bodies everywhere and they don’t want change.

Start with end in mind

Change is hard and it doesn’t necessarily follow your plan. Stay true to your vision, your ideal future state, and be flexible on the strategy you take. Stay agile and adapt. And remember to build from small steps with demonstrable, concrete results.

Technorati Tags: intrapreneurs, interpreneurship, innovation in established corporations

Change is a journey. It is multi-dimensional. Following the uncertainty principle, it seeds its own story of successes and failures. Many have written on the topic of change and change management. Perhaps, Franklin Covey summarizes the best.

Knowledge is the theoretical paradigm, the what to do and why. Skill is the how to do. And desire is the motivation, the want to do. In order to make something a habit in our lives, we have to have all three.

– Stephen Covey; The 7 Habits of Highly Effective People

At the end of the day, our energy flows to where our attention goes. If you are a manager tasked with improving teamwork between silos, ensuring the decision-making process incorporated all the right individuals from different groups maybe more important than the decision itself. If you are implementing new processes, providing training and tools are great, but not enough without the proper incentives to ensure people are utilizing it. 

Change Cycle

The change cycle starts with awareness. Whether you are using the ready-aim-fire or ready-fire-aim method, change is a process of trial & error coupled with reflection, which drives needed course corrections. Just like a treasure map, the change process guides its followers through a complex network of interactions, activities and deliverables. Given that, it is crucial to define and communicate your change process, whether the desired change is cultural, procedural, organizational or any other type. This not only provides a structured methodology to what may seem like a chaotic process, but it also builds-in accountability and engagement for all.

As you are initiating and implementing your change process, you also develop your design language. Sometimes explicitly, but mostly intuitively, we pick a design language for presenting and communicating change. Our design language kit includes everything from fonts, colors, images, vocabulary, terminologies, attitudes, styles, principles and more. It redefines and establishes our new belief and value system, and sets the foundation for establishing common understanding and vision. 

Staring at a blank canvas can stir up emotions of fear, doubt and excitement. However, maintaining a forward momentum is crucial for change progress. At times like this, to maintain momentum towards the desired goal, recognizing what it is not is as important as understanding what it is. Remember, change is a journey, a marathon and not a sprint. As Yogi Berra said “When you come to a fork in the road, take it.” However, keep in mind that through your learnings and reflections, you may need to course correct. And, be ready to challenge your beliefs and values, as you are building a new reality.   

Lastly, as you move through your change process, keep in mind Michael Fullan’s eight basic lessons of the new paradigm of change. They are not only great advice but valuable wisdom.  

• Lesson 1 - You can’t mandate what matters. (The more complex the change the less you can force it.) 
• Lesson 2 - Change is a journey not a blueprint. (Change is non-linear, loaded with uncertainty and excitement and sometimes perverse.) 
• Lesson 3 - Problems are our friends. (Problems are inevitable and you can’t learn without them.) 
• Lesson 4 - Vision and strategic planning come later. (Premature visions and planning blind.) 
• Lesson 5 - Individualism and collectivism must have equal power. (There are no one-sided solutions to isolation and group-think.) 
• Lesson 6 - Neither centralisation nor decentralisation works. (Both top-down and bottom-up strategies are necessary.) 
• Lesson 7 - Connection with the wider environment is critical for success. (The best organisations learn externally as well as internally.) 
• Lesson 8 - Every person is a change agent. (Change is too important to leave to the experts, personal mindset and mastery is the ultimate protection.)

As many innovations and new product development (NPD) projects succeed, many more fails. In my research study “Innovation Management in Multi-Divisional Firms: Factors that Lead to Successful Development of New Products“, I look at why projects succeed or fail, and what can you do to improve their success rate.

Intro

A few years back, I conducted a research study on the topic of “Innovation Management in Multi-Divisional Firms: Factors that Lead to Successful Development of New Products” as part of my Management of Technology Masters degree. The unique part of the research, at least at the time, was to analyze the new product development success factors from the influence of newness: newness of the technology and/or newness of the market.

You can access the research and its findings here. However, a quick summary would be worthwhile to share. Please note that, the projects used for this research took place in a single firm, within the computer and peripherals industry.

Why new projects fail or succeed?

There have been many studies done to uncover the reasons why new development projects fail, including in the established firms. Winning at New Products: Accelerating the Process from Idea to Launch, Third Edition by Robert G. Cooper, The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials) by Peter Drucker, and Commercializing New Technologies: Getting from Mind to Market by Vijay K. Jolly are few of the books on this topic. Here are a few reasons why projects fail:

• Lack of understanding of the real needs in the marketplace;
• Poor execution of the new project;
• Inability to overcome the difficulties faced by established organizations:
• Lack of management skills for new product development;
• Lack of processes within the organization to nurture the vagueness of new product concepts;
• Organization’s inability to network and bridge its competency gaps to bring the new product to market;
• Concerns on cannibalizing the existing businesses;

With that said, studies also highlight common factors that influence new product development success:

• Importance of having a good understanding of the marketplace;
• At the project level, quality of the execution and players involved;
• Importance of organization’s top management support;
• Establishing the needed synergy and alignment with existing competencies;
• Organization’s ability to network;
• Effort and skills employed in order to effectively communicate the characteristics of the new product offering to the marketplace;
• Skills and past experiences of the management team with new product development;
• Recognizing the project characteristics and managing project differently for high-technology uncertainty vs. low-technology uncertainty;

Research Focus and Propositions

Project focus was understanding the impact of product ‘newness’ and key organizational factors on new product development success: perceived degree to which project’s commercial and technology objectives have been achieved. Factors studied include:

R&D and marketing interrelation/intercooperation;
Organizational networking: division and project teams’ ability to network;
Top management support;
Project management execution;
Each of these factors further analyzed for contingency relationship to technology or market newness; basically if the factor is more important for products with higher degree of technology or market newness.

Conclusion

“There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system” – Niccolo Machiavelli, The Prince

The main purpose of this study was to investigate the role of a product’s technology and market newness, R&D/marketing intercooperation, organizational networking, top management support and project execution in the success of new product development, and whether the product’s technology and market newness influence the success of the innovation indirectly. There are obvious limitations to the study, such as the sample size used, as well as the subject variability. However, regardless of the limitations, insights gained from the study are also beneficial.

The results of the study showed that the product’s market newness, top management support and project execution have direct influence in the innovation’s success, while technology newness indirectly influences the organizational variables studied. Implications and recommendations for management can be summarized as follows:

• Top management support and project execution has strong influence on product commercialization success. As such, management should:
  1. Establish new product development lifecycle to ensure the activities that must be undertaken during the development;
  2. Encourage, if not require, quality project execution proficiency from development teams: special focus on initial screening, preliminary market assessment, preliminary technical assessment, business/financial analysis, product development and customer test;
  3. Continue to screen projects to separate low potential projects from high potential projects;
• Technology newness characteristic of the new product has definite influences on the project’s success. As such, the management teams should:
  1. Recognize the innovation characteristics and adjust organizational processes accordingly;
  2. Alter their organization’s social interaction model based on the technology newness, as information exchange will help reduce the associated risks and uncertainties with new technology;
• Management must provide necessary resources for the new product development activities, including product concept testing with customers;
• Organizations need to re-adjust their business requirements to foster the new product development, especially around financial expectations for the new product.

Though these findings are not a complete surprise, they do highlight the complexities associated with new product development. This is one area where sweating the little stuff definitely does matter. Good luck!

Technorati Tags: NPD, new product success factors

The profitability equation is quite simple: when a firm’s revenue from selling its product or service is greater than the cost of offering it, then it is concluded that the firm is profitable on that given offering.

Profits = Revenues – Cost

If we further analyze this simple equation, then we recognize that the revenues are a function of the quantity of a product or service sold at a price that the customer is willing to pay. This price is chosen based on the attractiveness of that product or service to the customer, i.e. its attributes. On the other hand, the cost is also a function of product’s attributes and the quantity it is produced at. For profitability, the ultimate goal of a firm is to offer products with differentiated attributes that customers are willing to pay high prices for, while keeping costs low and competitors out.

What does that mean for your innovation? Innovation is about implementation of a new idea for the purpose of creating value: value for the firm, and value for the consumer. Innovations come in many forms, and the research on innovation and innovation types can be quite confusing, as each author has his/her perspective and terminology. Unfortunately, this is further exacerbated by the fact that innovation has become the latest buzzword or Holy Grail for firms as they look for growth.

Innovation Types

Lets take a look at some of the ways your innovations can contribute to the bottom line of your firm.

• Create cost advantage – If you can produce the same product cheaper, you will improve your profitability. If you can become the low cost producer in your industry, then you achieve cost leadership. Economies of scale and experience curve clearly play into becoming a low cost producer. Examining your value chain and value network is a good start for determining the specific costs associated with each activity, as well as how your competitor is performing that activity differently.
  1. Process innovation – when we think about improving efficiencies and increasing productivities, as well as reducing costs, we think about process innovations. The overall goal is to remove or reduce non-value added activities from the delivery of the product or service, such as FedEx’s use of scanning technology to provide shipping status of packages to inquiring customers. Six Sigma and Total Quality Management (TQM) are process management programs that are focused on increasing efficiencies or taking out wasted steps. However, don’t just limit your process innovation to obvious examples; improving the efficiencies and effectiveness of your software development processes can enable you to better your time to market for competitive advantage.
  2. Technology innovation – research and technology related developments are included in this category of innovations. While the incremental innovations are small improvements, usually derived as a result of the learning curve, radical innovations can completely displace the incumbent technology, such as transistors replacing vacuum tubes. Utilizing technology roadmaps and linking them to product roadmaps is an effective way to synchronize the two activities, and focus your innovation investments.
• Go for price premium – what differentiated product functionality or service will convince your customers to pay extra? As I highlighted in my blog “Innovate with Quality” establishing a competitive differentiation should not be limited to just technology, but you should also focus on your brand for building and growing a loyal customer base.
  1. Product innovation – this type of innovation encompasses differentiation through features and functionality that the current offers do not have. Firms tend to mainly focus on improving existing products or services, and creating line-extensions, as this is a less risky type of innovation. Some examples would include cameras in cell phones, wireless connectivity, Crayola’s special crayon that only writes on Crayola’s special paper.
  2. Value-delivery innovation – this type of innovation includes differentiation stemming from improved customer experience through branding, marketing, customer service and other networks and alliances. Examples would include Apple’s iPod, with its popularity is driven by the Apple brand, ease of use through iTunes end-to-end integration, as well as its incredible style.
• Increase the size of your overall market share – increasing the number of buyers in your market will positively impact the revenues. Innovation types discussed here, such as product and technology innovations, would contribute to increasing your overall market share. In addition, you should also investigate ways to reach customers you didn’t serve before.
  1. Business model innovation – these innovations are about developing new ways of doing business. Generating revenue by hosting online advertising, and Amazon’s plan for leasing computing power and digital storage over the web are examples of how companies are extending their reach to serve customers they weren’t serving before.
  2. New venture – this type of innovation is about taking the product or technology that exists to new markets. Hummer’s retargeting of their military personnel carrier to soccer moms is an example of a new venture. Firms’ extension into China, Latin America and other emerging/developing countries are all methods to gain more customers.
• Look for growth – firms are pursuing innovation for growth. This pursuit further requires them to invest in disruptive innovations, organic innovations, and innovations through an acquisition strategy.
  1. Disruptive innovation – this is the creation of new markets based on disruptive technologies or new business models. These types of innovations are often difficult to recognize, and can take time to develop and grab a hold in the market. Growth of digital cameras and their impact to traditional film, or PCs vs. mainframes are examples of disruptive innovations.
  2. Organic innovation – a method through which firms reposition themselves for growth by tapping into their most important assets: their core competencies and valued customers. IBM as an e-commerce-enabling company, and UPS moving beyond package delivery to a global provider of specialized transportation and logistics services are examples of organic innovations.
  3. Acquisition-based innovations – mergers and acquisitions (M&A) are a way to gain access to new innovations and markets. Although this strategy can certainly enable growth, such as in Cisco’s case, expected results can be difficult to achieve due to the many challenges and complexities that are involved in M&A. Nevertheless, acquisitions are a popular strategy for growth.

Innovation Strategy

Recognizing your innovation type, and its role within your innovation strategy helps you ensure it is aligned with your firm’s current and future objectives and goals. In addition, managing your innovation programs as a portfolio not only provides better visibility of your efforts and management of those efforts, but also presents opportunities for new discoveries and synergies.

Analysis of your innovation portfolio will help determine if you are focusing on the right types of innovations. If your innovation strategy, which is aligned to your business strategy, is highlighting the importance of growth for your firm, yet you find yourself mainly focusing on product and process innovations, you know you have too narrow a focus on innovation.

In your innovation portfolio, you should also analyze the differences of success rates between your innovation projects. The results of the analysis will be illuminating about what works and doesn’t work within your firm, and where you need to focus in order to improve the return on investment of your innovations.

Your innovation strategy and your portfolio will also help determine how to build and manage your innovation network: internal and external partnerships. Successful collaboration can bring out more creative ideas, improve knowledge sharing among groups, facilitate shorter innovation cycle times, and result in improved productivity and quality.

Sources of Innovation

Where does innovations, or ideas for innovations come from? Although not the focus of this article, it is worth considering a few departing thoughts.

• Deep customer understanding – study your customers, their workflow and pain points, but go above and beyond and deliver to their unspoken needs.
• Blend design with technology – examine all potential dimensions of your product or service and determine how you can extend its value, such as in the example of Apple’s iPod and iTunes.
• Continuous improvement – study your value-delivery chain, and look at each step and determine how the value is added; then determine if it can be done better.
• Networks and alliances – knowledge of other advancements, trends and shifts can highlight innovation opportunities.
• Look for trends – change is constant, so look for changes in demographics, behaviors, attitudes, and believes.
• Be observant – innovations come from unexpected sources, including unexpected usage of your products; be observant and be open.

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