The following problems continue to plague innovators:
- New product failure rates run at 75%-85%
- New business start-ups are even higher at 92% failure rate
- There is a high degree of iteration in ideas and business plans needed to succeed with the right formula
- Companies address the wrong opportunities or miss the nuances of the right opportunity
- Companies burn through cash propping up the wrong ideas and products
- Uncertainty rules; flux is constant
Many market research and innovation methods, philosophies (?) and techniques have been formulated to address these difficulties, yet improvements in capability seem merely piecemeal or incremental at best. In my experience advising companies on the front-end of innovation for the past 8 years, I see many unanswered questions that remain ripe for new approaches and perspectives. These include:
- How can we better and more reliably “Know our opportunity, know our market, know our customers” before we generate ideas and concepts?
- How can we better define our markets to frame the widest potential opportunity?
- How can we define "value" and understand, discover and realise new varieties of value leading to innovative products and services?
- When is the right time and context to engage customers / users in collaborative efforts at the front-end?
- How can we focus and constrain idea-generation without losing creativity and inspiration?
- How can we determine our market and innovation strategy based on fuller understanding of the market opportunity?
- How can we build more robust business cases that confidently predict our return on investment from addressing market opportunities? How can we determine willingness to pay, demand levels and market sizing before a concept is given the green-light for development?
- How can we better orchestrate and manage tangible and intangible assets to discover and address market opportunities?
- How can we build a repeatable capability for the front-end of innovation focused particularly on pre-concept opportunity discovery and validation?
- ... whilst still ensuring speed to market, rapid learning and assimilation of new insights, reduced failure rates and improved return on innovation investments..
Why “The Design of Opportunity”?
So I have decided to rename my blog The Design of Opportunity to provide a forum for my and other’s perspectives on exactly these questions. Why “Design of Opportunity”? Well, I see tremendous potential in taking a design-thinking approach to address the above questions. In other words, knowing which method or more likely blending of methods to apply for any given market, opportunity context or problem situation is a design problem in itself - one concerned with determining and deploying the best mix of enquiry methods, units of analysis, measurement techniques, modes and timing of user engagement, study contexts and definitions of customer value to answer the question "what is the market opportunity?" rather than the more typical question "what is the solution we should develop to address any given market opportunity?" More often, the emphasis at the front-end of innovation is weighted towards the design of the idea, the concept and the solution rather than determining the optimum practices needed to add depth, detail and nuance to an understanding of the market opportunity in the first place. If firms, entrepreneurs and innovators were able to perform the latter more reliably, robustly and repeatably, then they would experience fewer failures and lower wasted innovation investments, as would their venturing partners. Hence, The Design of Opportunity is solely concerned with the design of the enquiry methods and approaches used in the early, pre-concept, market opportunity discovery / validation stage of the front-end of the innovation.
To execute "Design of Opportunity" thinking, I feel there is a need to strike a balance between linear, quantitative, input-output, systematic processes to the front end of innovation at one end of the spectrum (for example, of the Strategyn Outcome-Driven Innovation kind, which I have assisted many companies to deploy), and the more, experimental, iterative, prototype-centred, exploratory, intuitive, ideas-inspiration driven approaches at the other (as typified by IDEO). To quote a commonly used phrase, "one size does not fit all".
In my experience, most innovation practices are designed for technological or product innovation (NPD) and focus only on idea-to-launch management of a specific technology innovation; they fail in areas of defining and sizing market opportunity. Through this blog, I shall attempt to offer ideas and experiences that address these failings. As part of the global Strategyn network yet operating an independent company that is able to take a more blended, flexible perspective when circumstances dictate, I hope to bring a holistic, open-minded view of the front-end of innovation methodological landscape, something which my team is already bringing to its clients in the UK and Europe.