When Should I Use KN3W IDEAS?

When you are tired of wasting 50% of your resources on the wrong ideas. The biggest challenge in business today is picking the right things to do, but when you keep picking them the same way you always have, you will end up with the same results you’ve always  had, and that  might not be good enough to survive.  The best new product process will not be able to turn the wrong ideas into winning projects, and the more ‘wrong’ ideas you work on, the less resources you will have to work on the right ideas.

The biggest challenge in business today is picking the right things to do - the right ideas

The pressure to be innovative in today’s business world is incredible – if you are not doing something different, launching new products or offering new services… your business is going backwards. A shortage of new ideas is rarely the issue for most businesses.

The difficult job is figuring out which one to run with. How do you pick the difference between an idea that is highly likely to be a soaring success, and that which is a sure bet to go down in a ball of flames? With the ever present demand for fast results and greater returns, we often fall into the trap of picking as many ideas as possible and trying to make them all work.

However, wasting valuable time and resources on poorly conceived ideas, strategies and business initiatives can be very damaging to a business – perhaps fatal – because even the best processes can’t turn the wrong idea into a winning innovation. Survival and success is about choosing the right business ideas from the start. It requires everyone thinking in a different way, and doing a few of the right things, very, very well.

Pick too many things to solve.........

and you will end up with no solution

Not even the best New Product Development (NPD ) process can turn the wrong idea into a successful new product or service.

According to a PDMA /Booz Allen & Hamilton study, about half the ideas that any business works on never make it to launch stage or fail soon after launch. And while statistics on new product failure rates vary by industry, it’s safe to say at least one out of every three new products launched will fail.

Dr Robert G Cooper is the father of the Stage-Gate^© NPD (New Product Development) process and author of the landmark book ‘Winning at New Products.’ He reports new product failure rates from five independent studies at between 34% and 42%. His own study referenced failure rates as high as 100%.

Cooper also quotes the PDMA / Booz Allen & Hamilton 1982 study mentioned above, which reported that:

a staggering 46% of all R&D / NPD resources are spent on products that never reach the market place.

out of every 7 ideas, about 4 enter the development stage, 1.5 are launched and only 1 succeeds.

A later PDMA New Product Development Survey completed in 1991 reports that out of 11 ideas, 3 enter development, 1.3 are launched and 1 is commercially successful.

Treating the symptoms

rather than the cause.......

 

will not solve the problem

Ideas are not cheap. Every wrong idea sucks up resources and time, reducing opportunities to turn the right ideas into winning new products.

More current data from one global consumer goods company suggests it takes 300 new ideas turned into 40 R&D projects to deliver 1 successful new product.

However, the data from this particular company also reports that half of their fully developed products fail in the final research stage. Was it because there was something wrong with the product? No, the idea was wrong in the first place.

It’s crazy to assume that the more ideas you shove into the front-end of the innovation process the more chance a successful product will pop out the back. Instead, the opposite effect usually occurs.

The more poorly conceived ideas you put into the front-end, the more clogged up the feasibility and development stages become, producing fewer quality results.

On the other hand, if you start off by working with a few good ideas you reduce the resources spent on weeding out the wrong ones. The more right ideas you put in, the more successful products come out. The quality of the ideas going into the innovation process will have more impact on the output than anything else.

Start with the wrong ideas and you will fail. Start with too many ideas - because you can’t figure out which are the good ones - and you simply reduce the resources you have to spend on the right ideas.

The Ideation sweet spot - when the people with a real understanding of the business, really understand the customer.

An article published in the PDMA Vision Magazine (March 08) reports the results of a study undertaken by Dr Robert G Cooper and Dr Scott Edgett to identify the best methods for creating ideas.

The study concluded that the most popular, yet least effective method was Internal Idea Capture - using the people inside a company to generate ideas. This was not because management and staff don’t understand the business, but because they are influenced and affected by internal politics, corporate beliefs and their own preconceptions.

The study found the most effective ideation methods were based on Voice of the Customer (VOC), proof that there is no substitute for really understanding your customer when it comes to generating the right ideas.

Getting VOC right is not that easy. It takes lots of time, can be very expensive and the right people need to be involved throughout every step. Conducting the quick fix VOC - where a research company does the hard graft, with marketing people simply reading the research findings, or listening to the taped session - is lethal. Equally dangerous is when a special group of customers are given the job of developing ideas. You can’t ask customers to make your decisions for you. They simply don’t understand or appreciate the commercial situation or technical limitations of your business.

In my experience the ideas creation sweet spot is where the internal knowledge of the business meets the external voice of the customer.

You need to understand both sides of a problem

before you will find a solution

that satisfies both sides