How to Be More Effective at New Product Innovation

Ivy Exec recently sat down with Moe Kelley, Director at Altman Vilandrie & Company, who has spent the past 15 years consulting to clients dealing with transitions in technology, including smart phone manufacturers, wireless carriers and cable companies.

Moe Kelley joined Altman Vilandrie, a 100-person strategy consulting firm focusing exclusively on telecommunications, media and technology (TMT) businesses, in August 2010. “If it touches a network, there’s a decent chance we’ve done business there,” said Kelley. His client work has touched on a variety of cutting edge topics, ranging from “Internet video and mobile apps, to robots, spaceships, connected cars and cybersecurity.”

As a strategy consultant working with companies looking to capitalize on shifts in technology, Kelley has had an opportunity to see firsthand how companies handle innovation and product development, and has identified the need for the right type of process in evaluating and launching new products and services.

We spoke with Kelley about his recent Harvard Business Review article, Deciding to Fix of Kill a Problem Product, to get his advice to product managers and business leaders on how to innovate more effectively.

• Process is Key

Earlier in his career, as he worked with big wireless carriers trying to add data services on their networks, Kelley and his team found they needed to figure out “Out of hundreds of possible new products, which ones should our client launch? We took a customer-centric and wallet share approach – focusing energy on new solutions to proven needs, areas where people were already spending time and money.”

Companies often have great ideas and might not even know it. “Companies don’t lack good ideas. They just need a process for identifying the top 3-5 ideas to build a business around. We use a process where we ideate and prioritize ideas. Sometimes 4 out of 5 winning concepts were ideas that the company had internally,” said Kelley.

For companies focused on new innovation, having the right process is key. “What are the top 5-10 ideas? Have a process for prioritizing initiatives and only fund the best ideas. Focusing resources and management attention on a smaller number of better ideas dramatically increases the odds of success.”

• Product Evaluation Process

To determine the viability of new innovation, companies should focus on three key areas: technology evolutions, shifts in customer needs and behavior, and how the competitive landscape is adapting to these shifts. For technology evolutions, what new capabilities are being created? As we look at customer behavior, how has technology impacted adoption rates and needs? “Customers choose the best solution to meet their needs. Technology change enables better, faster, cheaper solutions to replace traditional ways of doing things. Like mobile phones vs. landline phones.”

• Fit with Customer Needs

The most common and devastating problem in product development is coming up with solutions that don’t address an important need. “I see it all of the time with clients.” Kelley continues: “…They think, ‘We’re losing out. We need more innovation.’ But innovation isn’t strategy.”

Customer interviews are critical to figure out the most important needs and to figure out if the new innovation meets those needs. Would anyone use it? Working with a company developing a very advanced technology, “when we spoke to customers, we found it addressed a need, but it did not address any of the customer’s top four needs,” states Kelley.

• More “Experiential” Research

For engineering or technology centric product teams, it is especially important to have the voice of the average user in the mix. Kelley recommends: “Sometimes product teams are too close to the product. For consumer products, make sure a normal person can use the product and understand it.”

Technology companies need more experiential research. “Technology businesses have text-based research, and even have side-by-side usable analysis on specific features. But you need to let people try out the technology. In 2007, if you looked at the steps to send an email on an iPhone vs. all the competitors, they looked the same. But if you tried to switch from email to web-browsing to music, most of the competitors required painful extra steps of navigating through menu structures, while everything was a swipe or a click away for the iPhone. These edge cases were very hard for product teams to get right and often weren’t even surfaced until too late.”

• Senior Management Buy-In

Senior executives are sometimes disconnected or unengaged in the process, which can lead to under-funded or under-resourced projects. Kelley advised getting senior management involved in the process, especially since “sometimes they can provide a fresh set of eyes or represent the voice of the typical technology user. Also, if you are focused on a smaller number of ideas, senior executives can be more engaged and help overcome roadblocks.”