The fuzzy front end of innovation confronts you with a lot of questions. In my new book ‘Creating Innovative Products and Services’ I try to solve them. In my last blog here on Blogging Innovation I presented a structured creative ideation approach called FORTH. It is a customer oriented practical method. A handy format to start ideation!
But how do you start ideation in practice? Often there’s a top manager experiencing an urgent need for something new. A new competitor may have entered the market, turnover may have decreased dramatically or a big contract is lost. And something has to happen: we need to innovate. And a special innovation project team is set up and starts generating ideas. But an essential point is often missed: ideas for what?
That’s the question!
Do you have a clear innovation assignment yourself?
You should never start an innovation expedition unprepared. As good preparation not only increases the chances of success but it also creates priorities, direction and the will to succeed. That’s why it is essential to start your innovation journey with a clear and concrete innovation assignment. This forces the top management, from the start, to be concrete about the market/target group for which the innovations must be developed and which criteria these new concepts must meet. This forms the guidelines for your ideation team when you are underway. You can formulate the innovation assignment with the help of the following six questions:
- Why? (Why do we want to innovate);
- Who? (Who is the target group);
- Where? (For which distribution channels, countries, regions or continents)
- What? (Evolutionary or revolutionary; products, services and/or business models)
- When? (Intended year of introduction)
- Which? (Which criteria the new concepts should meet)
Together with your top management you answer the above question in an innovation focus workshop. Often your board has not decided yet on the criteria the new concepts should meet. Then it helps to ask some questions. In practice you will go a long way with the following eight questions:
- Turnover. How much turnover must the new concept realise during the next three years or, if new products will cannibalize on existing products, extra turnover to be realised?
- Profit margin. What profit margin should the new concept realise?
- New. Should the new concept be new to the market, new to the country or new to the world?
- Attractive and pioneering. How attractive and pioneering should the new product concept be to the target group?
- Talk of the town. To what extent should the new product concept be the talk of the town among potential customers?
- Positioning. To what extent should the new product concept fit into the current brand positioning?
- Producible. To what extent are we obliged to make the new product concept ourselves (with our own manufacturing facilities) or can we work together with partners?
- Strategic fit. To what extent should the new product concept fit into the strategy of the organization?
So in discussion with your top management, you can collectively formulate which criteria the new product ideas must meet as well as determine the ambition levels. Here’s a real life example of an innovation assignment of a company in temporary staffing of agricultural workers in Europe:
In order to stay in the market in the future as an efficient partner with regards to the supplying of temporary and full time jobs for the agricultural market, we have to link up closely to the top of the agricultural market. The challenge is to develop new or renewed attractive but simple services with regards to labor (in the broadest sense of the word) for farmers and nurseries in our working area. We direct ourselves in the first place to the top 10% of companies as far as size in greenhouse farming, dairy farming and pig farming. The new, renewed services should have a potential turnover of 2.5 million euros per year per service, three years after its introduction, with a profit margin of 5% of the turnover. Ideally these new services should link closely to those aspects we are currently good at, such as farm care, posting and the posting of EU co-workers. Our aim is to create three new services this year. The assignment for the AGRO innovation team is to present three mini new business cases on the 25th of June, which meets all the above-mentioned criteria.
This innovation assignment gives direction and manages expectations of both the top management as the members of the innovation team. You can download a free checklist on how to make an innovation assignment at the website of the FORTH innovation method.
I wish you a lot of success getting a clear focus before you start!
Gijs van Wulfen leads ideation processes and is the founder of the FORTH innovation method. He is the author of Creating Innovative Products & Services, published by Gower.