What's the best way to balance innovation and risk in product development?

First we banished the word customer, we only have users. It seems to be a semantic gimmick, but ensures a cross-functional mindset alignment towards what users would use, instead of what customers could buy. Then we use all possible direct methods to get in touch with our users (community, feedback, questionnaires, pre-releases...) nevertheless our product development benefits most concrelety from the indirect channel, data-driven based on usage, obviously with explicit user consent. This applies to connected software solutions, and looking at anonymized "traffic" gives a lot of insight. If the user interface leaves some freedom (e.g. chat or voice input) some unsupported functionalities will emerge automatically, even prioritized for you.

Do you know any company that says, "I don't care about my customer?" No, right? 100% of companies will say they focus on their customers' needs. So where is the point? The point really is, what level of priority do you really put them? Do you really focus on customer needs before profits? Second, and maybe more difficult, is to grasp the unbiased customer needs. As the customer needs are observed by you, they are, by definition, biased by your point of view. So the big challenge I see is to try to remove this bias as much as you can.

In my opinion, understanding the consumer and how they behave in their environment is a key critical insight. It shows you in many cases not just the problem that you would want to fix but how the eco system around the consumer work and this alone has its own merits. It can drive a series of innovative solutions to make consumer lives better. In reality in some cases consumers don’t know what they want and sometimes don’t see the problem until you show them a concept that can generate more value to them than their traditional ways. Additionally, your brand must match your consumers. You cannot be everything to everyone so focusing on understand who are your consumers and building personas and consumer journey maps is quite critical.

Indeed. This is the most important first step - understanding people’s needs in depth. Notice that I didn’t say target audience but rather ‘people’. Because when we use jargon such as target audience, it’s easy to skip the most fundamental human truth. And as a marketer or innovator our job is to go after the human truth - in other words our needs. One other caveat is be careful with the research. The research we conduct should be able to go behind the surface and reveal the essence of the human truth in the most authentic way. I’ve seen many research examples - particularly qual - that stay on the surface. And that’s actually dangerous as you might be missing out on crucial insights.

I find the Jobs-to-be-Done framework extremely valuable: In the absence of your product, what are the most important jobs your customer has to do; and what are their problems doing those jobs? That perspective helps to avoid seeing everything through the lens of your solution - i.e. avoid seeing every problem as a nail, only because you have a hammer.

I don't know. Within innovation, if you haven't failed, you haven't tried hard enough. I thought we lost the stigma of failure a long time ago.

I’ve found a lean start up approach to be critical. Continually iterate on ideas, early and often. With consumers, but also with customers/sales and other key stakeholders. Continue to improve your product/service throughout the entire innovation process.

Innovation is certainly a process, with learning along the way coming from both successes and “failures”. It’s nothing new to recognize that some of the greatest new product innovations come on both internal learning … and the learning of others. It can be iterative and at times frustrating, but the rewards from true breakthroughs can be incredibly rewarding.

I find the RAT ('Riskiest Assumption Test') approach very powerful: Before you start building anything, a prototype, MVP or a 'minimum lovable product', define: what is the riskiest assumption in your product idea? It may be technical feasibility, or that users feel that the problem you want to solve is significant and that they will pay money to have it solved. Often you can test this with research or by asking prospective buyers straight questions before creating a prototype.

Here’s my perspective on validating ideas. Swiftly deconstruct your leading ideas into physical prototypes. Through a cycle of making, displaying, testing, and learning, you gain insights into the feasibility, viability, usability, and desirability of your concepts. Remember, maintaining a beginner's mindset and engaging in collaborative problem-solving invites surprising outcomes. Stick to your core values and continually experiment. Heres to playing with courageous curiosity.

EXPERIMENT BY PRETOTYPING instead of PROTOTYPING… What is pretotyping? YOU FAKE IT BEFORE YOU MAKE IT ???. Check it out here … Pretotyping is a technique for testing hypotheses and validating ideas quickly and cheap, founded by Savoia. It involves creating a simplified version of a product or service to collect user feedback and understand market demand. It’s a non-working prototype. Pretotyping reduces the risk of failure by assessing market response early in the development process. A famous pretotyping story is how Tesla ‘faked’ their first electrical car, the Roadster, using a so-called ‘glider’ of a Lotus Elise to confront their potential customers with a ‘real car’, leading to 250+ launching customers who paid $ 5000,- in advance.

I’ve brought MVPs of my innovation product/services into the process much earlier than what was traditional. It allows you to continually iterate and improve the offering with all key stakeholders. And, you can kill ideas before too much investment in time and resources is made.

I like the hypothesis testing approach to crafting wild experiments as it can be used before MVPs . we believe <this capability> will result in <this outcome> we will have confidence to proceed when <we see a measurable signal>

Concept validation is a crucial task in the entire innovation management process. When there isn’t any reliable data within the company and in the market, then experimenting is the credible way to collect primary data. An example of successful experiment is A/B testing where you not only validate the idea, but also how to implement it within the product. There are plenty of tools such as Google Optimize, VWO, Omniconvert, and Unbounce to conduct A/B testing with various stages of prototypes.

?? Embracing the Experiment-Learn Cycle in Innovation In the dance of product development, one step has been my game-changer: Experiment, then Learn. Predicting tomorrow? Tough. But here's my rhythm: Dare to Try: New avenues often lead to uncharted wonders. Measure, Don't Guess: Use metrics, hypotheses, and experiments as your compass. Fail? No Sweat!: Instead of defeat, I see a goldmine of insights. Each misstep refines my next move. Success? Iterate!: Building on what works ensures our innovations remain relevant. In essence: A growth mindset turns every outcome, win or setback, into a stepping stone. To innovate is to continuously evolve. ????

A successful innovation is always a collaborative effort. What I found most useful and learnt from my colleagues is to write down in detail, early on in the process, what this idea is about, who will it benefit, what are the inputs and outputs, what existing capabilities it may enhance, a high level product design if possible and as well as pros and cons. Ideas that are written down allows deeper engagement and shorter iteration cycles to connect with stakeholders for feedback, expand further and validate.

Risk is inevitable, but cannot be predicted. Uncover weak spots through action. Trust in the trials through doing. Walt Disney use to say at a certain point you have to stop talking and start doing. Strategy decks, meetings, emails, and zoom calls are not doing. Make things tangible with more than words. Show them to each other, customers, your friends and family. Test and learn. Then rinse and repeat.

Indeed! Each team member plays a unique instrument in the symphony of UX, and innovation is our collective melody. Solitary genius? That's yesterday's tune. Today, it's about harmonizing diverse notes and rhythms. Sharing visions, embracing varied perspectives, and dancing to feedback's beat is where magic happens. With brainstorming as our jam session, co-creation as our ensemble, and agile as our rhythm, we craft chart-toppers. Remember, in the UX concert, it's "Unite, Tune, Encore!" ??????

The Dance of Collaboration & Iteration in Innovation ???? You can't whip up innovation solo; it's a team sport! Share the vision, soak in diverse views, and pivot with purpose. Brainstorms? Make them regular. Feedback? Your golden ticket to refinement. Use agile methods, co-create, and keep the innovation train on track. Remember: To truly innovate, blend collective genius with the magic of iteration. Because together, we don’t just move forward; we soar!

Write down the goal to achieve, the underlying hypothesis that led to choosing the current initiatives, and the data that support the hypothesis. This allows for everyone involved to collaboratively analyse new data and interpret feedback in the right context to make decisions on the next iterations to achieve the common goal, or, if necessary adapt the hypothesis or change the initiative.

I agree. I had an experience where there were only a few active projects in the pipeline at one time, all with long project timelines, and big budgets. Lots of consumer research. I changed our process to be more iterative and quick-moving. I kept the pipeline full so we could adjust when we needed to kill a project early in the innovation process. Then we could activate something new into the pipeline and still meet our launch window with retailers. You can’t be afraid to kill projects early when consumer/customer feedback is not strong. I’ve seen too often key stakeholders get wedded to an idea and push it through despite that feedback, which yields expensive, poor-performing launches.

In my experience, portfolio management is one of the most challenging things for a product manager but it is a tool of mastered correctly, can save the organizations massive time, resources and capital in the scale of 10s of millions of dollars for multibillion dollar company. Your resources are limited which is a fact and you need to balance between activities and initiatives running to be delivered in short, mid and long term. Having gates for every initiative and portfolio manager overlooking on the overall pipeline can support taking tough decisions to choose what to advance and what to kill and where to pour more resources and where to pull out resources from.

Your innovation portfolio should look like this: 70%: Incremental innovation for improving existing product for existing and new markets. 20%: Breakthrough innovation for creating new product for existing or new market. 10%: Disruptive innovation for re-inventing existing categories or creating new categories for existing or new markets that will cannibalize your core business, but re-invent the industry with your company as the leader.

Mastering the Portfolio Juggle in Product Management In my product strategy journey, managing a portfolio is like mastering the art of juggling. ??♂? Diversify: Don't lay all bets on one idea. Balance from tiny tweaks to game-changers. Stage Wisely: Every product's at a different life stage. Balance from idea inception to market delivery. Risks & Rewards: Know when to pivot, stick, or bid goodbye. Use Your Toolkit: Portfolio matrices, roadmaps, stage-gates – they're not just buzzwords; they're your compass. Diversify, balance, decide. Here's to products that not only dazzle but deliver! ??

I agree with this, having a culture of innovation where members of the organization can easily generate ideas and build on it and create experiments on how to innovate and not just on product innovation but on process, structure innovation as well. I have seen major organizations where the management is very prohibitive of members of the team Proposing something new and innovative and usually don’t give you the support needed to innovate and bring more value to the business or make the process too complicated that you give up at the end.

When someone would ask me what is the most crucial step in creating an innovative company, I would say creating the innovation culture. I’ve been teaching a course on this topic for the last four years. As someone involved in innovation for the past twenty years, I can safely say having the right culture is an absolute necessity. Culture is a nebulous word; for a lot of people it’s challenging to dissect it. Because they can’t physically see and touch it, they omit it. However, culture is the aggregate of our human endeavors and practices. It’s in a way the end result. It involves how we treat each other, how we communicate, how we define failure, what fear means to us. Etc etc.

Be intentional to reduce biases and comply with existing regulations - Problem-solving using innovative technologies requires a solid understanding of your market. Your team should conduct meticulous research and gather market data to ensure that biases don't impact the development of your innovative product. Also, keep in mind that achieving a balance between innovation and risk in product development includes ensuring a diverse team. This diversity brings various perspectives to the product creation process and enhances its inclusivity. Equally important is grasping the regulations in the market, so your product adheres to them and aligns with societal expectations.

When I was at Google, Eric Schmidt propagated the 70-20-10 principle to balance risk and innovation: investing 70% of resources in the core business, 20% in new developments and 10% in new, bold ideas that might seem crazy at first.

In my experience, Design Thinking plays an important role in the product development. Putting yourself in your customer’s’ shoes and seeing what and how the product should address your customers needs is important. Think of Airbnb as an example. Initially, the company was struggling to get revenue from its business and realized that the quality of photos of the listed properties were very poor. Airbnb not only started sharing high quality property images but also provided quality descriptions of the properties for better decision making.

Don’t seek balance, innovation feeds on risk and is integral to it. Better than seeking balance, focus on understanding your or the client’s appetite for risk (including failure) and mitigating or addressing the factors that will affect innovation success. These include: Team capability, culture and leadership; fit-for-purpose budget; clear (initial) product goals; a well developed project roadmap with milestones and critical paths; decision making process; competitor assessments (including their response to your innovation); thorough customer and channel understanding; and routine, tough assessments on progress. Most of all, successful innovation requires the intangibles of persistence, flexibility and agility.

Elevate your game by placing unwavering trust in your team. Embrace the diverse brilliance of every member in your Design Thinking sessions. Remember, it's not about a one-shot attempt. Dare to stumble early, refine, and reimagine your product. After all, evolution is born from feedback and data-driven tweaks! ???????