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"Wouldn’t it be cool if …"
And with that phrase comes a chance to lose tens of millions of dollars—and maybe your job.
We don’t want you to be afraid of what we call the "idea monkey" (someone who tends to come up with tantalizing, imaginative ideas) in your organization and his big thoughts. Far from it. Helping companies come up with the Next Big Thing is how we make our living. Idea monkeys with their big ideas play a critical part in the process.
What we oppose is thinking that the innovation process starts with the idea monkey’s big idea. Too many ideas fail this way. Take it from an idea monkey and his ring-leader partner.
Yes, of course, you often hear about the legendary entrepreneur with all her big, successful ideas. But dig deeper into her successful company and you’ll find rigor and process supporting the brilliant entrepreneur’s brain children.
And without the due diligence? Well, you’ve seen this movie before: The idea monkey has a super cool idea for a colorful gizmo whose ad copy writes itself. And so the idea monkey, perhaps someone in R&D, develops a "safe" cigarette. Or one of the senior marketing idea monkeys decides that since the consumer market is bifurcating, what their fast-food chain should offer is an "upscale burger," or some aggressive entrepreneur says "What this new Internet thing needs is its own online money to serve as an alternative to credit cards."
And so what you get are ideas that never fulfill their promise: R.J. Reynolds’ Smokeless Cigarettes, McDonald’s Arch Deluxe, and Flooz currency.
In each case, the idea was "good" because the product did exactly what it was designed to do; the problem was too few people cared. And unfortunately that is too often the case. While some companies consistently nail the right insight and deliver evolutionary or revolutionary ideas against it, others spin their wheels creating new products and services that prove at best irrelevant and at worst career-ending.
The difference: The companies that don’t struggle understand how cost-effective innovation really happens. As we have talked about in previous columns, innovation occurs at the synchronized intersection of:
1) A meaningful insight or market need
2) A new product, service, or business model that meets that need
3) A communication and commercialization strategy that connects the two
Think of the definition as a three-legged stool. Most companies successfully build only one or two of the legs—and Step 1 is most often the missing leg—causing their innovation efforts to fail. To succeed, you need all three. And you will experience a lot more success and waste far less money if you take the steps in order. For example, a fast-food chain takes note that consumers in focus groups are consistently saying they long for a hamburger appealing to adult tastes and would pay extra to get one. And it just so happens that last year your idea monkey suggested just such a hamburger. That’s the time to move forward with it.
You need to start the innovation process by devoting a disproportionately large amount of your time to discovering the market need (Step 1). More specifically, what the market needs that customers would readily accept coming from you, your brand, or a company you could acquire. You already know the methods for doing that: market-segmentation exercises, insight workshops, online panels, and focus groups.
If you do create this discipline of stepping back and objectively listening to consumers, you may find, on the other hand, that your idea monkey’s really great idea, while intriguing, is not something your customers are willing to pay for. Sure, some consumers liked the idea of McDonald’s (MCD) offering a "grown-up" burger, but most people don’t go to McDonald’s because they want gourmet food. They want speed and consistency. True, the company offered the Arch Deluxe during a time when it was struggling and needed something new to stimulate sales. But it wasn’t new offerings like McPizza and McLobster that turned the company around. It was when McDonald’s got back to the basics with its simplified menu—e.g., "I’ll take the #2 and super size it!"—that it got back on track.
Allowing customers to order their meal by number is not as "exciting" as coming up with a new sandwich. But it was a truly innovative model for addressing a sizable need, which created many happy customers.
Remember: Big insight first. Big ideas second. Big promotion third.