Every week, I talk with CEOs who tell me they want to speed up innovation. In fact, they want to schedule it. Recently a product leader shared with me an OKR to ship one major innovation each quarter, measured as “users will give each innovative feature a top rating.”
This frustrates me deeply, but I try to restrain myself and sympathize with CEOs. Instead of getting indignant or overly academic, let’s unpack what various folks MEAN by innovation, and then come back to why “scheduling innovation” doesn’t make much sense.
Stakeholder by stakeholder …
- When we lose a deal, the sales team is strongly incented to point to some missing feature. (Sometimes accurately, usually not.) Up the management chain, that gets simplified down to “if we were more innovative, we’d have Features X and Y and Z that customers are asking for.” Of course, this is the opposite of innovation since those missing features are already being promoted by competitors and appearing in RFPs. A more accurate description would be that “Features X, Y, Z are table stakes since we’re late on something the market already knows it wants.”
- CEOs are under constant pressure to open up new segments or markets or revenue streams. And those new segments tend to have incumbents. So we need something uniquely interesting when we enter that new market – a way to differentiate ourselves and outflank competitors. Hence the demand for “a new twist, a magic bullet, something really innovative to grab share from entrenched players in our intended next segment.” Great if such a thing exists and has eluded competitors for years, but far from assured.
- (B2B) Marketing is constantly pushed to widen our funnel and generate more interest. Our messaging is focused on the core customer problem that we solve, bolstered by case studies or testimonials, but that can feel repetitive. “We got great attendance at last month’s webinar about machine learning. Let’s add a series of white papers/webinars on other innovative tech like blockchain, low-code and multi-cloud microservices to pull in prospects wanting the latest.” Real customers, of course, should ask if we’re actually using those and how (specifically) it makes their lives better.
- Boards and investors (and therefore CEOs and CFOs) want something that’s a high barrier to entry. “What’s truly unique about our app, something the competitors can’t copy? Can we patent our experience or reporting? How much better is our scalability algorithm?” Something really innovative drives a hotter IPO or pricier acquisition.
IMO, the challenge is that innovation is in the eye of the
beholder customer. We can’t make them love something or spontaneously declare us to be innovative.
Real Innovation is Hard, Rare, Not Always Obvious
So putting on my narrower non-executive product hat, I’d start with the definition of “delighter” from Kano models: delighters or exciters go well beyond what the customer might imagine and ask for. Their absence does nothing to hurt a possible sale, but their presence improves the likelihood of purchase.
Relaxing that a bit, maybe “a feature, capability or product that adds huge value in a way that most of the audience doesn’t expect, and which drives adoption, engagement or new sales.” Said another way, we don’t get to decide if something is innovative – the market decides. And this is a perceptual judgment – how users feel and think – rather than me deciding that my hard work deserves the “innovation” label.
I expect serious market-shifting innovations (in some particular area) to happen every half-decade. Email, WWW/browsers, Wi-Fi, search engines, recorded music, washing machines, autonomous vehicles… In hindsight we often mis-remember all of the earlier attempts and near misses that precede most of what we think of as innovations.
You’re probably leaping right to the iPod/iPhone: ground-breaking, surprising, springing fully grown out of Steve’s head. But Silicon Valley had been investing in mobile devices for decades, and many of the iPod/iPhone team worked earlier at General Magic (early 1990’s), on the Newton, GRiDPad, GO, Palm, or a dozen other startups that were too far ahead of the tech to succeed. FYI, Alan Kay wrote specs hauntingly similar to the iPad in 1968.
IMHO, the iPod’s real innovation wasn’t rounded corners or click wheels, but the iTunes marketplace that finally let users buy and deliver actual music in a way that hundreds of MP3 players couldn’t. (BTW, Apple bought iTunes, originally called SoundJam MP, in 2000.) So berating our designers and engineers and product managers for not being as innovative as Steve misses the point.
Or going further back, Carl Benz built the first gasoline-powered car in 1885, twenty three years before Henry Ford shipped his Model T. Ford’s innovations were around assembly lines, salaries and the 40-hour work week. (And there’s no record of him saying that thing about faster horses.) The stories we tell ourselves about innovation aren’t that useful.
Finding something that customers need and don’t yet know they want and will lead to massive adoption or word of mouth and hasn’t been uncovered by the competition and is technically feasible and fits our funding/economic model will be quite rare. Certainly not solved by writing quarterly goals to be more innovative. We can’t demand or schedule innovation.
So what’s our alternative?
We can schedule and fund discovery: the intentional, organized, thoughtful, stepwise, interview-based search for real insights. We can regularly get out of our corporate bubbles and talk with (listen to!) large numbers of actual users/customers/prospects. Because it doesn’t matter what our product managers (or executives or salespeople or investors) think… our ultimate users and buyers get to decide if something is valuable or entertaining or innovative.
There are tons of resources for how to do this well.* But product discovery is lot like drilling for oil or designing vaccines or writing a hit musical: no guarantee of success and no fixed timeline. We have to do the work, apply our best tools and techniques, listen and learn like crazy, tilt the odds in our favor. We have to send our smartest folks out to interview, survey, observe, analyze, hypothesize, self-critique, and humbly look for what others have missed. Discovery favors the prepared mind.
So how do we help our executive teams to see discovery as the path to innovation? I think this needs a concerted effort by Product (and Design and Engineering and Marketing) to “sell” executives on the value and uncertainty of discovery. Make it more tangible, framed in non-specialist language:
- Remember that the rest of your company is about execution and deadlines and deliverables and current-quarter revenue. Discovery is about deferred gratification and eating our vegetables. So bring a truckload of empathy (not lectures) into the boardroom.
- Get execs involved in hypothesis setting: “What don’t we know that we’d like to confirm/deny? What are some inexpensive ways we might find out? What are you hearing?”
- Include a ‘what we learned/upcoming experiments’ section in status updates. If it’s worth doing, it’s worth reporting. And budgeting for. And scheduling. And celebrating.
- Collect instances where we were 100% certain of success, jumped right to full implementation, and delivered low-value stuff. “Remember Product Bravo? 2 years, $3M spent, and no customer adoption. Same with Project Foxtrot. Before we greenlight $4M for Project Oscar, let’s put $50k and 8 weeks into serious validation.” It’s natural to forget previous bad outcomes.
- Share real discovery artifacts. “Here’s a two-minute video of a real end user explaining why price isn’t her issue, but our weekly invoicing made her cancel. Suggests a way to reduce churn and still getting full price. We could test quarterly invoicing against deep discounts for full-year subscription.” Encourage folks to ask what else we’ve learned.
- Frame discovery in investment terms: “We don’t know which stocks will go up/down tomorrow, so keep a balanced stock investment portfolio. Likewise we need to put 5-10% of our ongoing product/design effort into testing dozens of ideas so that we can up our odds.”
- Merchandize smaller innovations: “This new workflow reduced abandoned carts by 4%. Real innovation from the design team.” “Marketing’s installed base upsell campaign doubled trial users for text notifications.” “A clever fix for that scalability problem has dramatically cut incoming P1/P2 issues.” Don’t be shy about celebrating outcomes or adding some sizzle.
- Avoid “innovation theater” if possible. A few hours sticking Post-Its on the wall generates lots of starter ideas, but no validation until we do the hard discovery work.
- Recognize that revenue comes from finished products, not ideas. So expect to spend 85% of your time pushing (great, successful, innovative, delightful) products out the door and into paying customer hands. By itself, discovery doesn’t pay our salaries.
Let’s not get caught in definitional wars about the word “innovation.” Instead, keep returning to first principles: “we help our users solve real problems and are constantly testing out ways to do that better.” And remember that discovery is an uncertain but essential part of building products that matter.
* I’m more cheerleader and executive motivator than ground-level explorer. For real expertise, buy a copy of Teresa Torres’ brilliant new “Continuous Discovery Habits” or grab hard-won advice from Alex Osterwalder, Kathy Sierra, Steve Blank, Laura Klein, David Bland, Josh Seiden & Jeff Gothelf, Holly Hester-Reilly, Steve Portigal, Hope Gurion, Daniel Elizalde, Petra Wille, Josh Zeratsky, Janet Bumpas, Jim Morris, Tristan Kromer, Clearworks, Tim Herbig, Felipe Castro, or dozens of other folks who really know how to dig deep for insights.