Phrases such as 'We will double our turnover by 2013' and 'Global market leadership within four years', familiar to marketing and R&D managers everywhere, are often delivered by chief executives with intriguing presentation graphics but no meaningful plans. So how can you deliver on it?
Many in this situation rightly initiate a substantial innovation project — with the aim of identifying one or more radical products for launch in the medium term, which is no simple feat. The process is risky and fraught with hurdles. So where do we start?
First, gather essential elements, such as predicted consumer needs, a high-performance team and mechanisms for open innovation. Over the past 18 years we have worked with a wide range of companies, big and small, to kickstart these initiatives and developed a radical, yet simple, rule of thumb.
If a large company wants to bring a new product to market, then its director-level management team must commit at least 24 solid hours during the initial concept-generation phase. Their attendance and support are crucial, and even the actual hours spent are critical to avoid failure. We call this principle the 'Golden 24 Hours'.
To succeed, the 24 Hours investment needs to involve director-level managers covering the key disciplines, such as marketing, manufacturing and engineering, who need to invest at least eight hours in kick-off meetings.
It is important that every minute is cherished, so we have developed an eight-hour meeting format, for a minimum of three managers plus key team members, to help concentrate efforts. Contrary to popular belief, radical product concept generation benefits from a written specification, albeit rather different from the typical 'Requirements Spec'. The aim in this first meeting is to produce this specification, which has three main elements:
An innovation objective.
A set of screening criteria to help define barely acceptable limits on the key parameters associated with the objective (timescale); the areas of technology the company is comfortable working in; the characteristics of a successful, radical launch.
12 prioritised ranking criteria which help to assess the relative gain versus pain.
Once finished, you can use this specification to brief all team members, which has great value when creating and assessing ideas. But it is the process of creating the specification which has the most impact — as the intense discussion helps catalyse the senior manager buy-in and motivation for success.
For example, during the meeting the innovation objective is challenged repeatedly to test whether the level of ambition it implies is proportionate to the risk tolerable to those who initiated that objective (typically the chief executive and senior managers).
Objectives are often written without the implications being made explicit. For example, a healthcare company wanted to increase existing market share by 20 per cent, yet not everyone realised it would then be open to monopoly concerns.
In addition, many firms want to replicate the market success of historic launches, forgetting the enormous investments and extended launch timescales. This can be revealed by assessing past successes and failures during the senior manager meeting.
Is the objective worded so that it unnecessarily constrains the innovation space?
For example, a VHS video recorder manufacturer had the objective 'New product concepts involving entertainment with video content… for launch within a year'. Changing the word 'video' to 'visual' gave access to the, then, new area of digital photography and led to the launch of one successful new product and the sale of a second concept.
Another important question is will the resources and infrastructure be available to meet this objective?
Innovation is much more likely to happen if everyone behaves from day one as if it will. This means future planning.
For a telecommunications equipment company developing a new equipment platform, it meant booking an extra-large exhibition space a year in advance. The company could then demonstrate prototype modules, and key customers could be reassured of a future launch, and persuaded not to invest in a competitor platform. This small cash outlay also sent a strong message to the development team regarding the sincerity of the launch date.
Finally, does the objective imply irresolvable conflicts?
Typically, it does not, but a subset of senior managers can believe so unless the implementation routes are explored. This can be achieved by asking each one, and the core team, for a one-page presentation on their selfish needs for the innovation initiative. The conflicts are then discussed constructively, probing the available evidence and the related ambitions. Often a resolution can be found, so each manager leaves the meeting with a stronger belief that it can be done.
By spending those Golden 24 Hours at the right time and involving the right people, that early investment can add tens of millions to turnover.
Lucy Rowbotham is consulting director at Cambridge Consultants