Everyday practical innovation – with Jerry Fix and Terry Carroll

To listen to the interview, search for Product Mastery Now on your favorite podcast player.

What product managers need to know about the Targeted Innovation Process

Watch on YouTube

https://www.youtube.com/watch?v=Zn7l9R-kUEA

TLDR

The Targeted Innovation Process is a practical framework that helps product managers drive innovation in their organizations. This approach focuses on understanding customer needs, generating quality ideas, and turning those ideas into real value. The process has five main steps:

• Stating the problem
• Understanding problem-solving styles
• Creating creative pathways
• Generating ideas
• Evaluating ideas

Introduction

Innovation is key to product management. It’s what helps create products that customers love and keeps companies successful in the long run. As a product manager, knowing how to use effective innovation processes is crucial to stay competitive in today’s market.

In this episode, Jerry Fix and Terry Carroll explained the Targeted Innovation Process, a practical way for product managers to drive innovation in their companies. They described each step of the process, shared a real-world example, and discussed how to show the value of innovation programs in your company.

A Working Definition of Innovation

Filling the Idea Funnel

Think of innovation in product management as filling a funnel with high-quality ideas. This approach involves coming up with lots of concepts and gradually refining them through different stages of development. The goal is to have a strong innovation process that provides a steady stream of valuable ideas for product managers to work with.

Staying Close to Customers

A big part of successful innovation is keeping a close connection with customers. This involves:

• Understanding their challenges and needs
• Observing their work environments
• Gaining insights beyond what customers directly tell you

By staying close to customers, product managers can make sure their innovation efforts match real market demands.

Two Ways to Define Innovation

Jerry and Terry shared how they think about innovation:

Terry: Creating a better mousetrap: This means making meaningful improvements to existing products or creating new, viable solutions that add real value for customers.

Jerry: Turning ideas into value: Innovation isn’t just about coming up with ideas. It’s about turning those ideas into tangible benefits for customers and the company.

Understanding the Targeted Innovation Process

The Targeted Innovation Process is a practical approach to innovation that focuses on generating high-quality ideas and efficiently turning them into valuable products. This framework has five key steps:

StepDescription1. Stating the problemClearly defining the challenge or opportunity2. Understanding problem-solving stylesIdentifying appropriate approaches for your organization3. Creating creative pathwaysDeveloping routes to connect ideas with innovation4. Generating ideasUsing various techniques to produce potential solutions5. Evaluating ideasAssessing and selecting promising concepts for development

This process is designed to be more focused and practical than traditional open-ended innovation approaches. It encourages product managers to consider real-world constraints and their organization’s capabilities throughout the innovation journey.

A Closer Look at Each Step of the Targeted Innovation Process

Jerry and Terry explained each step of the Targeted Innovation Process in more detail:

Step 1: Stating the Problem

The first step in the process is to clearly articulate the problem or opportunity you’re addressing. This involves:

• Creating an open-ended problem statement
• Gathering input from various stakeholders
• Avoiding the temptation to jump straight to solutions

By taking the time to thoroughly understand and define the problem, you set a strong foundation for the rest of the innovation process.

Step 2: Understanding Problem-Solving Styles

Different problems require different approaches to solve them. In this step, you’ll:

• Identify the most appropriate problem-solving style for the challenge at hand
• Consider both incremental and breakthrough approaches
• Match the chosen style with your organization’s capabilities and culture

Understanding these styles helps ensure that your innovation efforts align with your organization’s strengths and the nature of the problem you’re addressing.

Step 3: Creating Creative Pathways

Creative pathways are routes that connect ideas with innovation. This step involves:

• Exploring different types of pathways (direct, supplemental, modification, tangential)
• Considering practical constraints such as time, budget, and acceptable risk
• Identifying the most promising routes for your specific situation

By creating these pathways, you establish a framework for guiding your ideation efforts in a focused and productive manner.

Step 4: Generating Ideas

With a clear problem statement, appropriate problem-solving style, and defined creative pathways, you can now focus on generating ideas. This step includes:

• Using various ideation techniques and tools
• Encouraging a high volume of ideas while maintaining quality
• Considering the chosen problem-solving style to guide ideation

The goal is to produce a diverse range of potential solutions that address the stated problem and align with your organization’s capabilities.

Step 5: Evaluating Ideas

The final step in the Targeted Innovation Process is to assess and select the most promising ideas for further development. This involves:

• Screening ideas against predefined criteria
• Combining multiple ideas to create stronger concepts
• Selecting the most viable ideas for prototyping and testing

By carefully evaluating ideas, you ensure that only the most promising concepts move forward in the product development process.

Real-world Example: Innovating a Floor Cleaning System

To show how the Targeted Innovation Process works in practice, Terry shared a real-world example involving the development of an innovative floor cleaning system.

Getting to Know the Customers

The product team started by doing extensive customer research, which included:

• Interviewing 30 different customers from various parts of the industry
• Conducting 90-minute one-on-one sessions with each customer
• Using discussion guides and video recording to capture insights
• Using competitive samples and 3D printed prototypes to help discussions

This thorough approach to customer research allowed the team to gain deep insights into user needs and pain points.

Key Findings and What Customers Valued

Through their research, the team identified several key things that customers valued in a new floor cleaning system:

1. Tool durability
2. Ease of use
3. Risk reduction (fewer slip and fall accidents)
4. Simpler cleaning process
5. Appearance

These findings guided the development of the new product, ensuring that it addressed the most important customer needs.

Testing and Improving Prototypes

Based on the initial research, the team developed prototypes for further testing:

• Created “soft tools” (made from aluminum instead of steel) for beta testing
• Gave prototypes to 12 customer locations for a 90-100 day trial period
• Visited each location weekly to observe and collect feedback from users

This step-by-step approach to prototype testing allowed the team to refine their product concept based on real-world usage and feedback.

Unexpected Discoveries and New Ideas

Through the Targeted Innovation Process, the team discovered several unexpected innovations:

• A universal holder system for easy replacement of parts that wear out
• Improved appearance for use in customer-facing areas, addressing a need they hadn’t anticipated
• Simplifying the cleaning process from three steps to two steps

These innovations show how powerful the Targeted Innovation Process can be in uncovering valuable product features that might not have been obvious at the start.

Making the Case for Innovation Programs

While innovation is crucial for long-term success, innovation programs are often among the first to be cut when companies need to reduce costs. To justify and protect innovation initiatives, product managers need to show their value using appropriate measurements.

Ways to Measure Innovation Success

Here are some key metrics to consider when justifying innovation programs:

1. Return on Ideas: Measure the value generated from implemented ideas compared to the resources invested in the innovation process.
2. Leading and Lagging Indicators:Leading: Expected revenue from ideas in developmentLagging: Actual revenue generated from implemented innovations
3. Idea Quality Ratio: The number of ideas that make it into product development compared to the total number of ideas generated.
4. Vitality Index: The percentage of total sales that comes from new products (typically those launched within the past 3-5 years).

Why Innovation Matters for Future Success

Recent studies highlight how important innovation is for organizational success:

• According to a McKinsey study, 84% of executives say their future success depends on innovation.
• The top 10% of companies earn twice as much revenue from products and services that didn’t exist a year ago compared to their competitors.

These findings show why it’s important to maintain strong innovation programs, even during challenging economic times.

Conclusion

The Targeted Innovation Process provides a practical framework for product managers to drive innovation within their organizations. By following this approach, product managers can:

• Generate high-quality ideas that address real customer needs
• Turn those ideas into valuable products more efficiently
• Justify innovation programs using meaningful metrics

Useful links:

• Connect with Terry and Jerry on LinkedIn

Innovation Quotes

“The best way to predict the future is to invent it.” – Alan Kay

“The value of an idea lies in the using of it.” – Thomas Edison

Application Questions

1. How can we improve our current innovation process to better align with the five steps of the Targeted Innovation Process?
2. What methods can we use to stay closer to our customers and gain deeper insights into their needs and challenges?
3. How can we create a balance between incremental and breakthrough innovation approaches in our organization?
4. What metrics are we currently using to measure the success of our innovation efforts, and how can we improve them based on the suggestions in this article?
5. How can we better integrate prototype testing and customer feedback into our product development process?

Bio

Jerry Fix is an experienced Marketing and Product Management professional with Digital Transformation experience that has successfully launched new products and transformed teams in retail, distribution and OEM channels across a variety of markets. He has significant experience managing global organizations to develop and support products and brands, build communication strategies, and guide the commercialization of products and technologies. Jerry is also experienced in guiding teams through various digital transformations and agile processes. His areas of expertise include:

• P&L management
• Lean and Agile product development
• Strategic Marketing
• Account development and management
• Financial Analysis
• AI, IoT, Cloud analytics and UI/UX product development

Terry Carroll has been working in product management for the past 20+ years.? His background includes cross-functional experience in engineering, finance, pricing strategy, marketing and product leadership.? Terry has always been interested in understanding the interworking of business and how companies decide on what products/services to produce and market.? Working in product management has given him a front roll seat in being part of this process.? Terry has a bachelor’s degree in Finance and an MBA from Belmont University.

Terry has been fortunate to work on some really cool innovative product solutions during my career.? In the 2024 PMDA Innovation Conference in September, Jerry and Terry shared some excerpts from a new Product Management book they are working on and plan to publish in 2025.? The focus of their presentation was on practical innovation, and their book shares best practices in product management and is written from a practitioners’ point of view.

To listen to the interview, search for Product Mastery Now on your favorite podcast player.