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November 2010

The Next Generation of Disruptive Renewal: This Is Your Father's Intercom


Of all the things I expected to get out of last week's Thanksgiving holiday, a lesson that underscores Forrester's concept of 'disruptive renewal' wasn't one of them.

The holiday saw me and my husband at my parents' home. We had rolled in late the night before, said our good-nights and trundled off to bed. 7 a.m. the next morning we were greeted by opera blaring through the intercom system, a holdover from the house's build in the 60s. Good morning, indeed. The fact that I knew to expect this wake-up from many years of experience did not make it any more palatable.

Fumbling for my morning cup of Joe in the kitchen -- center of the house and also location of the main control panel for the intercom -- I was startled to see innovation had sprouted from this thing that had so aurally colored my teenage years. Perched on a small, purpose-built shelf integral to the console was an iPod. The aria that had roused me from my beauty rest was not issuing from a more-often-than-not staticky FM station, but from a selected track on Apple's slick offering.

(This led me to the inescapable conclusion that my parents are hipper than I suspected, which somehow made me feel even older. Mom and Dad are shopping at the Apple store. What's next? Abercrombie and Fitch?)

It brought to mind the Disruptive Renewal report recently issued by Mark Mulligan of Forrester which he blogs about here. In it, he makes the argument that disruptive technology -- connected devices that empower consumers to make all new kinds of choices about how to interact with your products -- can spell the future for your company or ring its death knell.

Forrester calls this disruptive renewal, which it breaks into three stages: that of disruptive empowerment, when new technology enables customers to make choices about how to interact with products; discontinuous change, when they re-evaluate traditional products and expect more from them; and the critical split of transformational innovation or terminal obsolescence, when businesses either react by transforming to meet (or exceed) the expectation -- or fail to do so, and just plain fail.

The power paradigm, as we know, has shifted. What was once the domain of the manufacturer has irrevocably moved to the consumer. Smart vendors -- like the hero of our little tale, the manufacturer of the intercom system -- hear and respond. Those who don't are likely to get outmaneuvered, become sidelined and irrelevant.

Is your company in danger of this? Forrester tells us that that enterprise products are as impacted as consumer products -- you don't shed your expectations as you walk into the office, do you? But in an October 2010 survey of 200+ product strategists, Forrester found that only 26% think their companies are responding effectively to disruptive technology, and only 5% think they are responding highly effectively.

I get it: it's daunting. The power shift. The weeding out the good ideas from the bad. The sheer costs associated with transforming how you respond. But take another look at our hero -- an iPod adaptor, a shelf, a calculated risk that their target demographic and Apple's intersect enough to make it worthwhile (also supported by the Forrester report, by the way), and boom, they've catapulted themselves from 1960 to 2010 and into relevance, and ya gotta think it's worth it, don't you?

What's the Score? Using Scoring to Align Resources


When you think about it, the aim of ANY organization is to maximize resources toward high value. That's easier said than done. What's important to one department may be less important to another. And often it's difficult to determine what's of highest value to the overall organization when multiple parties, each with crucial initiatives, are competing for the same limited resources.

Value and Risk scoring can help. Attributes for determining the value of a project or program may include items such as:

  • Regulatory / Contractual Impact
  • Socio-Political Impact
  • Strategic Alignment and Importance
  • Financial Return / Profitability
  • Competitive Advantage Impact
  • Business Operations Impact / Reliability / Efficiency
  • Probability of Commercial Success
  • Organizational and Market Leverage / Reusability / Opportunity Enablement

The above scores can be weighted, averaged, and compared with a risk score to come up with a single composite score. Typical risk areas to assess are:

  • Technical Complexity
  • Program Complexity
  • Existing Skill Base
  • Availability of people and facilities

Alternatively, some organizations simplify this into a single "Complexity" score that can be subjectively determined and set to low, medium, or high.

Having scores is not a cure-all however. The best alignment of resources should never be left to an automated system. Though a score can give a general hint at a project's relative value, ultimately, what is needed is dialogue.

Use your personal budget as an example. If you have limited funds / resources, and your spouse has important purchases coming up, and you do as well, you may need to have a discussion to evaluate tradeoffs and / or work together toward a creative solution. It is the same in business. Meanwhile, a well thought-out scoring system can help speed up the decision process.

Survey Results Are In: How Do You Compare?


Written by Maureen Carlson, Partner at Appleseed
Partners

Maureen Carlson

For those of you following this space, you know that a few months ago I asked for your participation in a survey that benchmarks today's product portfolio management opportunities and challenges. To those who joined in: a big thank you! We had an overwhelming response with nearly 1000 participants this year.

I'm pleased to say the results are in and the report is ready to roll off the press. A few tantalizing tidbits to whet your appetites:

  • 57% of participants said that one of their top three pain points was having "too many projects for their resources,"
  • 42% find their forecasted schedules "mostly to highly inaccurate,"
  • "Not being able to drive innovation fast enough" was ranked as their 3rd greatest risk YET
  • 60% indicated that their organizations are "risk averse to highly risk averse on new product innovation."

And that, my friends, is just the tip of the iceberg. Of course, all survey participants will receive a copy of the report in the coming weeks. But if you can't wait that long, attend my session at the free PIPELINE 2010 online conference this Wednesday, November 10th. You can sign up at www.pipeline2010.com.

See how you stack up against your peers, split out by industry, job title, revenue, and reporting structure. Does your organization take the lead, join the pack, or lag behind when it comes to taking risks, killing bad projects, and allocating resources? Now's the time to find out. And what next steps can you take to shore up where you need to? The key takeaways and recommendations sections may offer the guidance you're looking for.

Plus, all who attend my session (and of course all participants) will also get a copy of last year's report, so you can compare where we all stood a year ago to where we are now, and draw your own conclusions about what that might mean for 2011.

Hope to see you at Pipeline 2010!

Going Virtual to Learn How to Execute on Innovation


Innovation is a two part challenge. First, you need the breakthrough idea. Then, you have to execute it. Unfortunately, the second step is usually underappreciated or overlooked. Chris Trimble, author of The Other Side of Innovation has spent more than ten years studying this topic. On November 10, 2010, he's going to share his findings about the one thing that vexes even the best-managed corporations: how to execute an innovation initiative.

Not ready to jump on another plane to hear nuggets of wisdom? You don't have to. That's because Chris is presenting about innovation in an innovative way -- at a virtual conference called PIPELINE 2010: The Online Conference for Innovative Product Development. If you've never attended a virtual conference, you'll find that it's not unlike live conferences: you can connect with other attendees, hear keynotes, choose speaker tracks, network, access sponsor resources in the Expo Hall, etc., -- with one major difference. You don't have to leave your desk.

Oh, and did I mention it's free? Check it out at www.PIPELINE2010.com.

Breaking Down Brand-Driven Innovation Into Next Steps


Consumer Goods Growth & Innovation Forum Review – Part 3 of 3

If you caught the Innovate or Die Webcast earlier this month, you heard from Chris Andrews, Senior Analyst of Forrester Research that approximately 80% of senior-level executives say that innovation is a priority for their company and that this priority has been on the increase post-recession. And while it's all fine and dandy to say that innovation is a priority in your organization, how do you actually enable brand-driven innovation in your organization and truly drive sustainable results?

Luckily, this was the exact topic presented by Hank Izzo, VP of Snack Innovation at Mars, Inc. and Jon Wilson, VP of Corporate Innovation at Kimberly-Clark at the 2010 Consumer Goods Growth and Innovation Forum. The session provided concrete strategies of how to impact innovation processes and culture. Here are few of the highlights:

  • Innovation should be an integrated, systematic process -- it's not something that should be done on the side when you have time, back in some broom closet or laboratory. It needs to be out in the open, woven into the fabric of every employee's job description, and the culture of the company as a whole.
  • Clearly and simply understand your brand:

- WHAT is your brand all about?
- HOW can you deliver against that brand promise?
- WHY will consumers be inspired?

  • Evaluate each new product idea or product improvement against the same criteria. Wilson shared with the crowd the questions used as criteria at Kimberly-Clark:

- Strategic role in the portfolio
- Articulate the need emotionally
- Target audience, both broad and specific
- Business opportunity
- Frame of reference, or category
- Points of difference from the competition
- Functional support, or reason to believe in those points of difference
- Product offering

  • Think about things from the market mindset early. What will disrupt the market? What will inspire the market? Start from there and innovate, as opposed to starting from a product perspective.

As articulated by these innovation experts, it's not rocket science to drive innovation into the organization, it just takes a process, a plan, and the time and resources to be able to execute. Random innovation is not likely to drive predictable results.

So, what are you waiting for?