An Except from Innovation Ready

The secret to product innovation is over a century old.

In a 2021 report published by McKinsey, only 6% of business executives said they were satisfied with their innovation performance. Year after year, a similar metric is published that demonstrates the challenges of being innovative. It’s not easy.

Meaningful innovation requires two key conditions be met before you are “innovation ready” to build the informed product solutions that customers really need and are willing to pay for.

Simply stated, those conditions are knowledge and imagination. Put another way, as the famous chemist Louis Pasteur said over a century ago, “Chance favors only the prepared mind.“

Many paths. Same destination.

There are multiple frameworks and theories on product development. Some of the most astute and popular that have shaped our way of thinking and better enabled the start-up and large enterprise alike are:

• Lean Start-up
• Design Thinking
• Jobs-to-be-Done (JTBD)
• Agile

Each of these has contributed best practices and valuable tool sets while emphasizing different aspects of the product development lifecycle.

While their focus and value stand out at various stages, there is overlap that is complimentary between them. For example, in Lean Start-up, Design Thinking, and JTBD, each focuses initially on understanding the user need, known as Customer Discovery, the Empathize stage, or Jobs to be Done, respectively. Different labels, same goal.

When we distill these frameworks, a few common foundational stages stand out:

1. PROBLEM: Empathize with your user to understand their need.

2. SOLUTION: Ideate a solution.

3. PRODUCT: Design and validate a product / business model.

In practice, each of these stages is built on iterative cycles of understanding the user, ideating and testing the solution, and layering in the realities of the market and business model.

Extending on the collective wisdom of these frameworks, Innovation Ready extends the paradigm to add focus to the specific conditions necessary to develop the informed insights that drive product strategy. This confluence of conditions is essential in developing smart, thoughtful products that users want and customers will buy. It’s these moments of inspiration that ultimately shape and form our work and, at a minimum, de-risk our product development activities, but more boldly, enable us to deliver the next break-through product.

There is no one size fits all process beyond the progression of the foundational stages. Product innovation is a non-linear evolution; the outcomes from one step are your true indicators of what to do next. Put too many rules around it and you may end up forging down a path that is not your best next step.

Where you start can be significantly different as well depending on your circumstance. An entrepreneur with an idea in a field they are marginally familiar with has much to learn. In contrast, a product innovator who has practiced in the same market and user segment for many years comes pre-loaded and likely starts with working hypotheses for products based on their experience and knowledge of the space.

But let us begin this journey with our target user, where we discover the problem to be solved and product innovation ignites.

User Problem

In order to achieve a goal, your user needs access to something and their desire to fulfil this need is the problem you seek to understand. Your mission is to gain a better understanding of your user, their problem, and why (and how much) it matters to them.

The path to defining your user’s problem is to become immersed in understanding their goals, observing their behaviors, and uncovering their challenges. Empathizing with the user is essential in this process to better understand their perspective and requires you to imagine how it would feel if you were in their situation. The deeper you can live your user’s experience, the more likely you are to discover their true needs.

Said another way, Jobs-to-be-Done theory frames the user need or ‘job to be done’ as a problem or opportunity that somebody is trying to solve, a goal your users are trying to achieve independent of any product or solution.

“Opinion is really the lowest form of human knowledge. It requires no accountability, no understanding. The highest form of knowledge is Empathy, for it requires us to suspend our egos and live in another’s world.”
-Bill Bullard, former Dean of Faculty at San Francisco University High School (often mistakenly attributed to Plato) 

As you gain confidence in identifying your user need, it’s helpful to form it in a written problem statement that summarizes who the user is, what their need is, and why it’s important to them. In this way it helps crystalize your thinking and becomes a reference point for what you are solving that you can return to through the product ideation process (and update when new insights arise).

In addition, it’s valuable to check that you have identified the core problem through a root cause analysis. A simplified version of “The 5 Whys” created by innovation pioneer, Taiichi Ohno from Toyota, is an easy and effective technique that starts with your problem and asks why it is occurring. The steps are:

• Create your initial problem statement defining the who, what, and why. Make sure it is grounded in the realities of your user.
• Ask yourself: “Why does this problem occur for this user?”
• Repeat until you uncover the core problem you are trying to solve.

Innovation Ready

Becoming immersed in the user’s needs and goals is the starting point to the product innovation process and as you deepen your acumen of the market dynamics and test your assumptions, you set the groundwork to solve your user’s problem.

The confluence of two fundamental conditions is required to meaningfully spark the types of insights and Aha! moments that drive your strategy and create viable products:

• Knowledge
• Imagination

Albert Einstein put it succinctly. “Knowledge is a map that guides us while imagination is the territory where we can roam freely and search for answers and opportunities. Imagination knows no restraint and it is the power that puts knowledge to use.”

When we fully understand our user’s problem, the dynamics of the market, and we place ourselves in an environment conducive to creative, divergent thinking, we become innovation ready and are well positioned to imagine innovative solutions for our users that become successful products.

This is not a new concept. Renowned thinkers through the ages have espoused similar truisms, to wit, Seneca, the Roman philosopher said, “Luck is where preparation meets opportunity”.

When we are not ready however, our product innovation risks being shortsighted and lackluster. The ancients had words for that, too. Confucius in 500 B.C. cautioned, “learning without thought is pointless; thought without learning is dangerous.” When we seek to discover solutions but are hampered by gaps and unchecked assumptions in our knowledge, this folly can lead to misguided product strategy that misses the mark. This is costly for any enterprise, but for the startup or smaller company, it can be the end of the road.

Building Your Knowledge

Solid domain knowledge of your industry is crucial to being set up for successful product ideation. On the other hand, domain expertise is not. You do not need to be a lawyer to develop products for lawyers. Or a mechanic to build tools that serve auto repair shops. But if you are building a product that targets police stations to track cases and have little knowledge of the law enforcement and the criminal justice system, your product will fail. You cannot solve the unmet needs of your customer if you do not understand their goals and the realities of their world.

Immersion in these three focus areas will exponentially improve your chances of a grounded and well-informed product strategy: 1. user and customer segments, 2. the market dynamics, and 3. a consideration for key aspects of the business model of your product.

User & Customer Segment	Market Dynamics	Business Model
* User and customer unmet needs and why it matters * Behavior analytics * Solution validation	* Existing solutions / Competitors (e.g., capabilities, business models, customer sentiment)  * Trends and projections * External constraints * Whitespace	* Market size * Revenue streams * Cost structure * Channels * Unfair advantage / Defensible differentiation

Thus, the iterations from user problem through to commercial product are continuously shaped by insights sparked from your validated knowledge of the user and customer segments, the market dynamics, and business model considerations.

In addition to the core focus areas, the expertise from adjacent domains can be significant in contributing and informing your solution. Typical examples include:

• Technical framework
• UX principles
• Human psychology

It goes without saying that the wealth of your past experiences and scholarship can jump start your path to becoming innovation ready and building profitable products for your customer.  

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