Wednesday, September 22, 2010

Innovating for the future that will be

When we work with our clients to create interesting new ideas, we always first start with trend spotting and scenario planning.  Many will argue initially that this seems unnecessary - it's easy to identify challenges or problems that need to be solved today.  Why spend the time looking 5 to 7 years out at a minimum?

There are several viable answers for this question.  Let's start with the undeniable facts and work our way to the suppositions.

Product Development Cycles.  The first issue to consider is how long it takes to get a new product to market.  In many firms we work with, this can vary from 18 months to 36 months.  So even if you are really good at spotting a near term problem or opportunity and are fairly good at bringing the new product to market, your solution will hit the market not today, not tomorrow, but at least a year and a half from now.  Will the conditions be the same?  Will the circumstances be the same?  Probably not.  Product Development cycles are undeniable - they exist.  If you aren't considering the future at least as far out as your product development cycle, you are shooting behind the curve.

The Pace of Change.  Looking at the adoption rate of new products and services, it's easy to say that we adopt new products and services much more quickly than previous generations, and it's also not a great stretch to assume they'll adopt many technologies faster than we do.  It took television almost two decades to become pervasive, but the cell phone did so in far less time and the internet even less time.  This means that product life cycles are ever shortening and new competitors enter or update their products and services all the time.  Firms that fail to understand that competition is increasing and product lifecycles are shorter than ever will be constantly surprised by competitive offerings.

Radical shifts.  Two years ago, if I told you that Lehman Brothers would be out of business and the US would own a substantial portion of GM, your response would have been ROTFLMAO.  Yet two years later we have fully adjusted our realities to those concepts, and many others.  As globalization increases, access to information increases and competitive barriers fall, radical shifts in economies and markets are more likely than ever, and the pace is only increasing.  If you assume your markets and your competitors aren't subject to significant and unexpected shifts, then you don't need to forecast trends and develop scenarios.  You are also arguing that you live in a protective bubble.  Radical shifts in an economy, in society or in legislation are much more difficult to predict, but it's useless and dangerous to assume these or other factors won't undergo a significant shift.  Better to anticipate the shift and plan accordingly.

What many firms do is solve obvious problems that exist today that may, or may not, exist in the future.  These firms are constantly disappointed to find that by the time their ideas are commercialized as products or services the products are either late to the game or don't provide any unique value.  That's because no matter how good you are at solving an existing problem, your product or service development cycle takes time to get that solution to market, and the idea competes with all of the other pressing objectives.  Your team needs to innovate in the context of the relevant future, which is dictated by how quickly you can bring a product to market, and what the relevant conditions will be in that time frame.  You must plan for change, and understand how trends will change your market and the expectations of your customers.  Then, you can create interesting, valuable ideas that are unique in that context, rather than produce ideas that are late to market or simply aren't unique.

Innovate with the future that "will be" in mind, rather than solving today's problems tomorrow.
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posted by Jeffrey Phillips at 9:30 AM


Anonymous Anonymous said...

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