Theory of Constraints in Innovation

In Mikes recent book, Simplifying Innovation: Doubling speed to market and new product profits – with your existing resources, he discussed the Guided Innovation’s unique TOC-based approach to rapid innovation improvement is helping companies slash time to market in half and nearly double new product profits. Whether you are struggling to get more sales impact from your new product and innovation investment or are growing strongly but still interested in taking your innovation performance to the next level. Customer Value Lens and much more. The book was just released in January and has received some good reviews.

Related Posts:
Product Relaunch – Try serving Chocolate Milk
The Hell with the Economic Stimulus Package – I’ll Lead
How to Form an Innovation Strategy

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Lean Startup case study on Pinyadda, a next-generation news platform. This Case Study was presented at Boston’s second Lean Startup meetup on 3/25/10.

If you are interested in learning more about this subject Eric Ries is hosting a Summit April 23rd in San Francisco: Startup Lessons Learned.

Related Posts:
Receiving Better Response Rates thru Agile
Boyd’s Law of Iteration: Speed beats Quality

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"What should CEOs be thinking about if they want to emerge from the crisis stronger than when it began?

If your sales are down and you’re losing money, you’re crazy not to be investing in repositioning. ……

……In a down period, while you may not have cash to invest, you do have excess people capacity. Most companies reduce it by having a layoff. That’s what I call cutting to the bone. You wind up weaker as a result."

I use this excerpt for 2 reasons. One to support a theory of mine that you should seriously look at re-launching your product many times during its lifecycle. It will be way of extending it and finding new sales channels.

However, seldom do people mention the other side of the coin. It is ok to find new markets but make sure you do some very good market research. Many people just think that if they find a market for their product that people are there waiting to buy it. Seldom will you find a market waiting for your Ipod, if you have one. The best source are customers that have adapted your product for their use. If you can tap into that as a resource, you will already have a built in resource or community to  assist you in marketing your product.

When I walk someone through the Spider Product Launch , a Re-launch practically has the first step completed:

See

• Define the opportunity
• Build Customer buy-in and input
• Customer relationships and commitment
• Build Customer persona

Never minimize this step. I believe it is the most important. By yourself, it is difficult to change perception. With a small group you can change the world. A good example of that is a small tea party in Boston a few years back!

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1. Is your product under advertised?
2. Can there be a broader target market?
3. Do you have certain disadvantages that you could turn into advantages?
4. Do you have any unused byproducts?
5. Could you be selling your product in a more compelling way?
6. Is there a social trend to exploit?
7. Can you explain your distribution channels?
8. Can you build volume and profit by cutting the price?
9. Does the product have new or extended uses?
10. Have you completed a win/loss sales analysis of the product?
11. How old is your last referral for the product?
12. How are your salespeople compensated for selling the product?

These are just a few of the questions that we go through when were getting ready to do a product relaunch. What is so important in a relaunch is that you do have a community built around the product. I am not talking about someone that believes in the cause like a nonprofit, but actually I am talking about a customer that would advocate the product for you. Relaunches in today’s marketplace, must have the ability to garner direct customer support.

Take a product that is not doing so well right now and see if you would be in that marketplace today, if you are just starting out. If you would not, can you stop? Can you sell it to someone else? I’m amazed at how many resources are lost in products that have absolutely no return on investment.  So if you really are thinking about leaning your marketing, I would look at how I would relaunch every product category that I have.  Then ask why am I not doing it that way and the investment to do it.  And if I cannot afford to do it cannot afford to stay in that product category?

Sometimes, the best re-launch is no re-launch at all!

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The most used the excuse I see in developing a buyer persona is that the buyers vary too much.  Okay, let’s just try to segment a portion of your customers.  Maybe it’s only 10% or if your lucky as high as 50%.  But creating some channel will facilitate in mapping out that buyer persona.  If we look at how will the purchase was made and determined by that group, it will lead into some very insightful information.  But I would encourage you to really try to understand the compelling reason they chose you.  That reason alone can clarify your marketing your sales processes, and improve your production forecast.

I know that may sound silly over just one statement but look at it this way.  If you could know the compelling reason that 50% of the customers buy from you, what would that mean to your bottom line?

P.S. A quick check to validate this, would be to talk to a few prospects that you lost.  Ask them what their compelling reason, not to buy from you.

We use our Lean Marketing Assessment to see where you stand and how well you leverage your core message and it is at the basis of our Product launch strategy. Learn more about these two products.

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The actual program was created to provide businesses with everything they could ask for in terms of ongoing marketing support, guidance, accountability and know-how to help them overcome the challenges facing them in launching a product in 2009. “It is not your typical, Internet launch program. If you are looking for a web based product launched, this is not for you,” says Dager. He adds, “It contains a mix of products, services, an authorized Duct Tape Marketing Coach to walk you through the process and the SPIDER Template to integrate your launch not only on the web but more importantly offline through your targeted industry.”

SPIDER is an acronym for See, Plan, Imagine, Design/Sell, Execute and Renew. Dager also added: “This is compilation of 30 years of product marketing launches in the process equipment field. I not only credit the Duct Tape Marketing System, which I use as an important part of process, but my recent training in the Effective Product Marketing program hosted by Pragmatic Marketing. This EPM seminar explored outbound marketing roles, priorities and processes that characterize market-driven technology companies.”

The SPIDER template also utilizes the newly formatted Ultimate Marketing System from Duct Tape Marketing. “We believe in installing a system,” says Dager. “Our experience is that a system will always outperform any other approach. We define your objectives; develop strategies to achieve them, than institute tactics to carry out your strategies. We deliver the package in One on One Sessions or you can even participate in group coaching.”

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5.  Internal focus instead of external. Your engineers and developer are not all knowing, but your customers are.

4.  Committed Resources : The resources that are built around a new project can get lost in the everyday shuffle.

3.  Not funded properly: Yes, Guy Kawasaki can start things for pennies, but I can’t.

2.  Having a system in place: How many times does a good idea fail because of a poor plan.

1.  Time : People just try to do things to quickly without having a good foundation in place. Creating linkage takes time.

Can you think of a few more?

Check out my Product Marketing Process .

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The Marketing Mavens by Noel Capon is a great book to assist you in this  identification. They have  slightly different take on it but the book brings out some points that may help you identify your market and client. He professes that the fundamental challenge of business today is to serve customer  needs amid continuous change.  Nothing earth shattering but he also states that the top companies do this based on these five core values:

1. Pick markets that matter.
2. Select segments to dominate
3. Design the market offer to create customer value and secure differential advantage.
4. Integrate to serve the customer.
5. Measure what matters

If you really think through his process, you can see how apparent your target market may become. Also, it corresponds to the Product Market and Product launch processes that I adhere too.

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We spent the day on:

1. Management Goals
2. Inbound Product & Market Data
3. Audience Persona Profiles
4. Target Audience & Segmentation
5. Messaging & Programs Strategy
6. Selling & Buying Process
7. Marketing Assets & Liabilities
8. Marketing Plan

As I reviewed my first day, the list above me reminded very much of what we go through in our Duct Tape Marketing programs:

1. Strategy before Tactics
2. Target Market
3. Ideal Customer
4. Core Message

Though I think their words ring a little more true with their target market, I believe that the message is very similar to ours. But let me tell you first who I am in the room with:

1. Technology Customers
2. Companies with 200+ employees
3. Product Marketing Managers

When I review who Pragmatic Marketing says they are: “Experts in technology product management and product marketing,” I believe they have done a good job in capturing their target audience.

Ok, so what did I learn.

1. I learned that the core messaging for strategy is very much the same for small and large companies. They may have many more segments but may end up being less defined as a result. This to me presents a huge advantage for small business. The more we move to our niche the more we can dominate. We have a great opportunity to develop a message, expertise and relationship with our prospects(customers). However, there are companies doing it very well with customer-focus groups and other tools that were discussed, small companies still have to earn the relationship.
2. Win/loss analysis : We simple do not spend enough time looking at why we won and even more why we lost. Especially important is finding out the reasons behind losses. Something other than price, delivery, etc. A trick mentioned is make sure this is not part of the sales process or using  someone that was part of the sales process to get the answers.
3. Get out from behind our desk and with customers. I think that is more of a problem with largest companies but it still holds true with many small companies that are product driven. Seldom can you maintain a competitive advantage by product alone, huh?
4. The personas, ideal client was rather a lengthy discussion and very useful. But honestly, was amazed that we were having this discussion base on the individuals that were attending the meeting. I felt this would completely understood and old news to these companies and it was not. However, what it showed me was how all this data is available at a rather inexpensive price for most of us and our ability to use such data to our advantage.
5. List Marketing : This was the terminology that was used to describe the marketing function. It is one that I struggle with on a daily basis in explaining what I do because I believe that is how most look at marketing. What event, ad, paper written, article published is how marketing is measured.  I believe that is the fault of us marketers though. We seldom work with clients basing performance on drivers. Typically, it is always and end result with a checklist on what we are going to do. John Jantsch told me once to work through the process with a customer and they will end up with a system without even knowing it. Selling a system is tough! Should I re-think my strategies?

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1. Lower the cost of testing. Chapter 8 of our new book, The Innovator’s Guide to Growth, suggested that companies should “invest a little to learn a lot” about key assumptions. When resources get scarce, you have to be even more creative about how to test critical assumptions. Fortunately, it has never been easier to develop and test an idea quickly and cheaply, using tools such as employee focus groups, low-resolution mock-ups, simulations, and “good enough” beta tests.

2. Creatively tap into outside resources. A lack of financial resources makes innovation difficult, but a lack of human resources to work on ideas makes innovation impossible. Resource-constrained companies need to develop creative ways to find bodies to work on innovation efforts.

3. Ruthlessly prune the portfolio. Most companies that claim to have no resources actually have plenty of resources–those resources are just tied up in the wrong activities. When times are tough, companies have to be ruthless about weeding the innovation portfolio. They have to shut down the least promising ideas early so they can really focus on the ideas with the most potential (I wrote about the innovation portfolio in more depth on Forbes.com). Even though there’s a risk that you might prematurely kill a great idea, better to kill one great idea early than to lose an entire innovation program because of lack of progress.

This is from Scott Anthony and you can read his entire post here.

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Scott D. Anthony is President of Innosight LLC, an innovation consulting firm in Watertown, Massachusettssay this in his Amazon blog today:

Companies just starting innovation efforts often begin by getting a group of people together and telling them “It’s innovation time!” I’ve never seen efforts like this succeed in meaningful ways.

• Instead, we suggest that companies begin innovation efforts by creating an innovation strategy that details clear targets and tactics.
• Clear targets help internal innovators know what they’re shooting for.
• Then think about the sources of growth.
• Look at what’s already in your development pipeline.
• Calculate the gap (it will almost always be a gap) between where your projections suggest you will be and where you want to be.
• Think of the tactics that are on and off the table.
• Use this “Goals and Boundaries” visual (from Chapter 1 of The Innovator’s Guide to Growth).

The figure (download it here) represents the “goals and boundaries” of innovation. Note how the figure includes a diverse set of elements, such as steady-state revenue, channel, business model, and brand. Customize the vectors for your context, and gain consensus about what’s clearly in bounds, what’s on the fringes, and what’s clearly out of bounds.

Gaining consensus on this visual will help you to evaluate ideas and to guide innovators in their exploration efforts.

Formalizing targets and tactics is a great way to kick-start your innovation efforts. Start allocating resources to support your strategy, and you are on your way to innovation success!

This is from Scott Anthony.

Technorati Tags: Innovation,Scott Anthony,Innovation Strategies,New Product Intorductins,Product Launch

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2008 | Aug 7 in Business Development , Management , Leadership

By Susan Weber

Strategic Work: One Step At a Time
Rolling out Product Innovations : Updating, enhancing or otherwise changing your products or services can be scary, but when done correctly, product innovation can truly revolutionize your business. The important thing to remember is that you needn’t tackle everything at once. Strategic product innovation work can be done incrementally.

For example, when I was working for a large financial services company here in the United States, I worked on a key strategic initiative: the implementation of a new bank. This was a huge project and very important to the company. So how did we approach it? We decided that implementation of this bank, including the hefty technology pieces, should be broken down into monthly releases. This turned a seemingly overwhelming and complex project into a manageable and far less daunting assignment. This approach also helped to mitigate risk, because it was easier to assess impacts (and recover if necessary) with smaller changes.

In the end the bank was implemented on time and on budget. Although this approach requires more planning on the front-end, it greatly increases the chances of success. Plus, it’s much easier to measure and quantify the results of smaller changes.

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