The recipe for successful innovation isn't all that difficult. Here are the ingredients:
- Right strategy
- Right financials
- Right product concept
- Right development process
- Right launch plan
The most important is the first. All strategy boils down to a single question: how will we win? If there is not clarity on this from the start, chances are that the product developers will focus on cool features and technologies with bragging rights; the result will fail in the market more often than not.
The single most reliable strategy is changing the game. When you change the game, your competitors will likely misunderstand and fight the wrong war, losing before the first marketplace skirmish and not even knowing it. Or they will scramble to catch up, losing months or years while you build an unassailable position. Either way, if you've done your strategic work right, changing the game is almost impossible to beat.
Five Game-Changing Templates
Here are five templates for changing the game. Each requires certain pre-existing market conditions. So don't even think about finalizing your strategy before you've done the customer research and deep analysis. Bad strategy can be worse than no strategy!
1. Go Premium
Remember when vodka was a commodity, and most people accepted the well brand? 1.75 liter handles retailed around $12. Then Grey Goose and Belvedere suggested that anyone not sipping super premium vodka was not someone to be seen with. The old brands lost. Liquor stores couldn't keep stocked with new .75 liter bottles retailing at $30-$50. And bars found they had a new top shelf.
2. Go Discount
Tired of paying those Uber surge prices? How about grabbing a scooter off the street for almost nothing? Either way you're going to get there, but scooter sharing costs a fraction of cabbing. Who'da thought that kind of price level was possible? Now that's innovation!
3. Collapse to the Middle
If the category is already segmented into a top shelf and a bottom shelf, make them both obsolete. Deliver all the quality of the expensive brand at the price point (or slightly above) of the discount brand. That's what Microsoft did when it launched Excel, making both cheap spreadsheets and bespoke programs unnecessary.
4. Make a Sandwich
This is the opposite of the Collapse strategy. If the category is unsegmented, simultaneously launch differentiated premium and discount products, targeting different customers. This immediately positions the heart of the market as mediocre, neither good enough nor cheap enough. Just remember, if you are making a sandwich, you don't want to be the filler.
5. Teamwork
Are there retailers or suppliers who have been frozen out by the status quo? Give them a platform where they can play. Kubota did that with small tractors, using a pre-existing U.S. distribution network that had been frozen out of the tractor market by John Deere. Sony did the same with studio-quality recording equipment in the ‘70's, by-passing the professional equipment distributors and focusing on electronics retailers. In the ‘80s and ‘90s, Microsoft grew to dominance by providing a relatively open platform; everyone won except the closed-system Apple, which found itself crushed by the tonnage of the rest of the tech world. But turnaround is fair play: Apple's iPhone invited everyone to build in the App Store. Bye-bye Nokia, Blackberry, Palm … and Microsoft.Making Strategy Real
Getting strategy right from the beginning is essential for major innovation success. But then there are those other four ingredients. That's where having the right systems in place can make all the difference.
Accolade® is best-in-class software for managing financial projections, product concept development, product development, and launch readiness. Select the right strategy, then we'll help you with the rest.
