Are you committing any of these innovation monetizing failures?
One of the companies I worked for is a startup that made 3D goggles for medical applications at the start of the millenium. Better than anything that was on the market then. How cool is that for doctors – being able to actually stand inside a patient’s body and have a real look see? Unfortunately this was a classic startup failure. The two brothers started the company, with their father as financial backing, with a lot of techy know how, but no business know how. They looked for partners to help them commercialize. Their first investor fleeced them. Their second partner ran away with crucial copyrights. And then they found out nobody was willing to pay for their invention. Innovation and commercialisation need to go hand in hand – before the first prototype is launched you have to ask your potential customers: what would you be willing to pay for this?
Companies are face increasing downward pricing pressures leading to job losses and cutbacks. The consumer goods business is particularly vulnerable, with giants such as PG and Walmart feeling the pressure (see WSJ article in references). An overwhelming majority (83%) of C-suite executives surveyed The need for successful innovation is clear, but plenty of innovative ideas fail, never get off the ground or fall into obscurity. In their book, Monetizing Innovation: How Smart Companies Design the Product Around the Price, Ramanujam and Tacke have noticed four types of monetizing failures:
- Feature shock – too many features in one product, that are unwanted These four failure mechanisms have common ancestry – the culture of the organisation. Innovation needs the right culture.
Failure to include your customers in your product development process leads to a product nobody wants.
RATE: Radical Agile Transformation Exercise
It is better to sell an optimized innovation, than not sell a maximized innovation. Ask:
- What new concepts, processes or products have you developed in the last two years?
- How did you know it was the right product?
- How did you know it was the right target audience?
- How did you check?
Bibliography: References links
Price War Pressures Consumer-Goods Giants – https://www.wsj.com/articles/p-gs-price-cuts-ripple-through-consumer-products-1516724949
Downward price pressure at ‘unprecedented’ levels – https://www.marketingweek.com/2014/09/12/downward-price-pressure-at-unprecedented-levels/
Monetizing Innovation: How Smart Companies Design the Product Around the Price, Madhavan Ramanujam, Georg Tacke, Wiley, May 2, 2016
Steven Sasson: https://en.wikipedia.org/wiki/Steven_Sasson
Wait! Before you go…
Sari van Poelje has 30 years experience of innovation on the interface of leadership and organizational development, executive coaching and transactional analysis both as a director within several multinationals and as an international consultant. Specialization in creating agile leadership teams and business innovation! She is the author of numerous articles and books on leadership and change.