Innovation Reactor

High-Velocity Product Testing

Innovators are always planting new product ideas. They start with a seed and try to grow it into a big, tall and beautiful tree. But often, instead of designing a strong trunk and branches first, they immediately start arranging the leaves.

Here’s a product development tip: build the trunk and branches first, then quickly let customers climb all over them.

The idea is to design and test the main parts of your product early-on and observe actual customer behavior, rather than just listening to what customers say or say they will do.

I’m a fan of high-velocity product testing. This means you get a prototype of the product or the experience into beta, get customer usage data on features or functionality, get information on customer experience pain-points, make adjustments, and then get the next version out fast.

Testing an actual product, with real users in their natural environment, is the foundation of developing something consumers will love. Because the real learning does not start in focus groups or through online surveys, but when you begin reviewing your first set of customer behavior data.

It’s amazing how many great ideas fall flat once they're in live testing, and how the unexpected things become winners. 

 

What is ideation?

What do Hollywood Director JJ Abrams, singer and songwriter Dave Stewart from the Eurythmics, Twitter CEO Evan Williams, and Melinda Gates – who oversees the worlds largest philanthropic organization – have in common? They all made the Fast Company Magazine, 100 Most Creative People in Business list. 

But what makes them so creative and innovative? What's behind the next Sci-Fi blockbuster, the words for a hit new song, a global social network, or improved heath and education in the developing world? The answer is simple – ideas.

The Most Creative People in Business have an abundant source of good ideas. The great thing is you can develop this capability too. 

If you want to out-innovate the competition you first need to out-think them. Ideation is the process of generating, exploring, and evaluating new ideas that can give your business a competitive advantage.

Just imagine ideation as a funnel. Insights, views, opinions, data, trends, and knowledge, are captured at the top. Then these elements are filtered in the middle to get the good stuff – new ideas – out the other side. 

There are four key steps in the ideation process:

1. Gather customer insights: Review customer research reports, analyze competitors, social trends, lifestyle patterns, and shopping habits. Search blogs, social networks, and customer service records. Conduct a number of contextual interviews (in-home, in-office, in-mall) with your target customers to understand their behavior in an everyday environment.
2. Find opportunity areas: Look for customer pain-points, problems, inefficient processes, or abnormal behavior. Give these areas names since these themes will serve as vehicles for exploring and developing new ideas. 
3. Brainstorm ideas: Create actionable design statements around your opportunity areas like "How might we improve our product delivery times?" or "What can improve our online user experience?" to provide stimulus and guidelines for brainstorming. Start generating lots of ideas, make sure these ideas are grounded by your customer insights and go for quantity.
4. Prioritize ideas: Develop some customer criteria like "Does this idea improve customers lives?"or "Is the idea different from what customers are using today?" and business criteria like "Does this idea build on the strengths of our core business model?" to help evaluate, rank and select the best ideas.

The 100 Most Creative People in Business have the knack of being able to repeat this process again and again to generate fresh ideas. However even the best can get lost and lose focus so here are a few things to watch out for:

• Ideation is not about defining solutions – ideation is about thinking and learning.
• Ideation is not about brilliant strategies – ideation is about exploration and direction setting.
• Ideation is not about creating advertising tag lines or flashy marketing – ideation is about understanding customer experiences.

 

Outliers: on the edge of innovation

With a spiky pink mohawk she stands at 5ft 7". Wearing a short burberry skirt, army boots, and biker jacket; outfitted with the latest GPS system and night-vision lenses, she explores dramatic ruins of power stations, crumbling psychiatric hospitals, abandoned missile silos, and rusted subway systems. She ignores the no trespassing signs in other forbidden places. As an expert in the new extreme sport of urban exploration, she supplies maps and advice to a whole underground community of dedicated adventurers.

 

In the book Outliers, author Malcolm Gladwell writes about people with "expertise outside of the ordinary." While puzzling to the rest of us, he found these humans are not a one-off phenomena. Rather, expertise comes not only from talent, but also from practice, hard work, rehearsal, many hours of experience, and seizing opportunity.

 

Outliers can be thought of as extreme users. People ahead-of-the-curve who define trends, patterns and popular culture. When developing new products, they are vital for customer research, since they have a disproportionate influence on technology, fashion and social behavior.

 

Extreme users are found at opposite ends of the curve. On a bell curve it's the points located farthest from the middle. Here you'll find either lovers or haters of your products, or what the marketing gurus call "early adopters" or "brand rejectors" respectively.

 

But shouldn't we be talking to the mass market since this is where the money is? Well to understand a flock of sheep you want to talk to the shepherd.

 

Extreme users decode the world around them differently. They use technology in new ways and have different perspectives on reality. These people are often fanatical and go to greater lengths in habit, action or opinion, so acquire better knowledge about their areas of interest than most others. These consumers can articulate their needs more vividly, while the masses in the middle, with limited exposure to your products have trouble. By focusing customer research on extreme users you can then extract a richer source of information.

 

So next time you notice a guy with blond dreadlocks and ripped jeans, who's into freestyle motocross, kitesurfing, rock climbing, 2000ft cliff jumps into deep ravines, and body armor before breakfast, look past the painful scars. Because he's probably the perfect candidate for your research on high-definition cameras, outdoor apparel, social networking and emergency healthcare (of course).

 

"Winning" is the new way consumers achieve control

In the movie The Matrix, the computer hacker Neo learns about the true nature of his reality – that he is actually trapped in a complex computer simulation, used by artificial intelligence to control humans and harvest them as an energy source. 

 

But what’s a kung-fu fighting hacker, dressed in black leather, got to do with innovation? Well if you’re going to design a smash-hit product, then you need to understand the current reality surrounding your customers. 

 

Just like The Matrix, many consumers feel there is a system that's unbeatable and uncontrollable. Constantly bombarded each day with job losses, out-of-control healthcare costs, school closures, higher food prices, "innovative" bank fees, and environmental disasters, many people are looking for a sense of control. 

 

One aspect to wrest back control, in a system that makes control difficult for people, is the desire to “win” by making small gains. Deals, rewards, or other positive experiences satisfy these motivations. Look at the explosion of savings sites like Groupon, Dailydeals, Gilt, or RueLaLa. Discount stores like Dollar Tree in the U.S. or Lidl in Europe have experienced a boom in their businesses too. Then there are the multitude of cash-back programs, 2-4-1 coupons, free shipping offers, gift with purchase, or loyalty rewards schemes. 

 

Since it's difficult for many people to win in the overall game of life, they go for wins that are more tangible and understandable – the small everyday “wins.” 

 

For consumers, moments of winning and control are treasures and value propositions that incorporate small "wins" now have greater appeal. So when you design your next product, make sure it helps customers feel like they are keeping up, rather than being kept down. Because if you're not part of the solution, then you're part of the Matrix.

Questions for evaluating and ranking new product ideas

 

In the Ideation stage of the new product development process you created a pipeline of breakthrough ideas. So what's the best way to rank and prioritize them for further concept development?

Start by bringing the team back together and also get key stakeholders in the room to discuss collectively the pros-cons of each idea or concept. Successful companies and leaders uncover the best ideas by asking the right questions. I’ve found somewhere in the region of 5-10 key questions focused on different elements - customer, brand, profitability, production, manufacturing, marketing, technology or distribution - are enough to create a short-list of ideas to take to the next stage. 

It’s best to apply a simple scoring system (1-5 points for each question) as this makes it easier to contrast and compare, while also helping to validate and communicate the choices within your organization. Here are some example questions for evaluating your ideas;

1. Does the idea fit with our business model, our brand or product portfolio?
2. Will this new product provide us with a competitive advantage?
3. Does the idea meet a customer need and add real value? Why do those needs exist?
4. What unique benefits will the new product provide to the consumer?
5. Can the product be copied? Is there patent protection or are there substitutes?
6. Is the market an attractive one – size, growth rates, profitability, competition?
7. What is the complexity of implementation? Will we have to build or acquire new technology?
8. Would the idea meet our minimum return on capital or profit margin requirements?
9. Is the product easy for the target customers to understand?
10. Can the product be sold through existing sales and distribution channels?

Phil McKinney www.philmckinney.com also suggests some great questions on his Killer Innovations Podcast to help rank your ideas.

The New Product Development Process (Part 1)

          

Innovation and new product development (NPD) can be managed and measured by using a standardized process. In many organizations the challenge for product development is to implement an efficient process, to improve speed-to-market and the chance of commercial success while preserving creativity. The critical phases of a robust stage-gate product development process are; Strategy Development, Ideation, Concept Feasibility, Build & Pilot and Rollout. Today we cover the first 2 stages and recommendations on how to implement the process within your business.

Strategy Development – research and defining the opportunity

The key ingredient of any innovation process should be the extensive use of data and analytics to support the strategy creation and ideation process.  Moreover, a clear understanding of your overall company strategy is important, since existing product lines and brand portfolios will define areas for new product development, product extensions or product refreshes. By understanding the consumer, competition, culture and macroeconomic environment you can then develop your strategy and identify potential opportunities.

Undertake primary research to gather intelligence into consumer behaviors, wants, needs, unresolved problems and attitudes. Because our thoughts, emotions, feelings and experiences lay mostly in the unconscious cognitive part of our minds, unlocking these is critical for finding unmet needs. Metaphor elicitation and observational research techniques have been proven to work best.

Host workshops and consumer labs that uncover emotions, feelings, passions and real-life experiences may also provide richer consumer feedback than your average focus group or survey. Gather relevant secondary data from market research reports and identify the latest social trends and technology from companies such as www.trendhunter.com. Finally, cluster your research data and market insights into opportunity segments and use them in the next phase to unlock new product ideas.

Ideation – generating the next breakthrough product or service

In the Ideation phase you use the opportunity segments and research to help develop the next breakthrough product or service. Brainstorming workshops can help you generate new ideas however planning is vital to make your sessions meaningful.

Before you start to brainstorm it’s best to send participants any competitor analysis or consumer research ahead of time so they can read and prepare. Make your sessions short (1-2 hours works best) to maximize concentration levels. Also develop some guidelines or principles to help focus your team’s mental efforts - these could be along the dimensions of economic, behavioral, pricing, production, manufacturing, technology or distribution – but don’t make them too narrow as to limit the creativity and fun!

While the CEO should champion innovation, ideas shouldn’t just come from the top down. Ideation sessions work well when comprised of people with diverse backgrounds, personalities or interests. Also try inviting creative Ad agency people, outside experts or cross-functional participants to bring in fresh thinking and alternative perspectives. Another great method is to host internal innovation labs with your customer service employees or suppliers, since they deal with your products and customer pain-points everyday. The result is better collaboration and a wider range of ideas through diversified thinking.

You’ve now created a pipeline of ideas to then rank and prioritize for further development. Additionally, by including people from all levels and giving them the ability to contribute their ideas and buy-in to the strategy, this creates collaboration and internal alignment that will ultimately speed-up the NPD process in your organization.

Let your customers design your next product

Companies invest millions in consumer research with the aim of developing new products and bringing them to market. Some companies are becoming smarter and reducing research costs, by using the web to engage in dialogue with customers then using the information gained to create new ideas for products and services.

Starbucks www.mystarbucksidea.com lets you share, post and comment on new Starbucks related ideas. Anything from their used cup recycling policy to feedback on the taste of the new Pike Place Roast. Since many consumers visit social networking sites and read posts but don’t have time to comment, Starbucks lets you vote on the ideas already posted so people then have a fast mechanism to either agree or disagree with what’s being said. This is a great way for Starbucks to collect quantitative data to understand consumer sentiment and pinpoint trends.

Dell created IdeaStorm www.dellideastorm.com an online community that allows customers to share ideas and collaborate with one another. Over 9000 ideas for new products and existing product improvements have been posted –sparking conversations between users. Dell then feeds the data back to their designers, engineers and programmers to bring the best customer ideas to life. Dell creates a great 3-way dialogue, by allowing employees to join the conversation, so they can provide tips, training or just a thank you for any new ideas.

Lego, the Danish toy company has a great site for kids www.lego.com/factory where they can design, share and buy their own customized Lego models. Kids can post their designs onto the site, share them and rate others creations. This helps Lego gain deeper insights into their target audience and from hundreds of postings has now launched 3 new products designed by actual fans.

Companies can also collect data on customer preferences and feed this into their new product development and ideation process. Dominoes Pizza www.dominoes.com lets customers create their own pizza from a list of toppings, crusts and sizes. Through the Nike website www.nikeid.com customers can design and customize their own shoes, gear and apparel – choosing styles, colours and personalization elements. Capital One www.capitalone.com lets customers build their own credit card from a choice of interest rates, rewards programs and graphics.

 

How is your company using the web and social networking to gather customer feedback, generate new product ideas and collect data on customer preferences to identify the latest trends?