Is now the time to risk product innovation?

It’s easy to batten down hatches until the financial storm passes, but be careful cutting back on creativity and innovation – you could end up with a defunct business. 

I don’t think anyone would be surprised to hear there has been a noticeable slow down in innovation investment, particularly in the experimental stage of product development.

“Prior to the economic crisis, companies were prepared to launch experimental products and failure was considered a... part of the innovation process,” says Nick Coster, a founding partner of product management consultancy brainmates.

Businesses are now more risk averse but they still have to provide new customer solutions.

“Companies are cautious and asking for more cost effective models for innovation... they’re looking for payback with stronger commercial outcomes... and a reduction of wasted innovation investment,” says Coster.

The focus is on identifying logical solutions to customer needs rather than developing products just to see if they will work, or building a product and then trying to find a market for it.

“There’s an urban myth about when NASA first started sending up astronauts and they discovered ballpoint pens wouldn’t work in zero gravity,” says Coster. “The story goes, they spent millions to develop a pen that wrote in zero gravity, upside down, underwater. The Russians used a pencil.

“The moral of the story: start with your customer’s needs and work backwards. And remember, innovation doesn’t necessarily mean creating new products, it’s about looking at your existing products and finding new usage and new markets.”

Bringing products to market is crucial to top-line growth and bottom-line results, but it’s also a risk. Innovation adds a genuine value and is linked to higher performance, but it can challenge the status quo or have a destructive effect as new developments change organisational practices and processes. A risk of costly R&D can erode profitability and shareholder return. There’s a risk in the time, effort and cost of commercialisation.

However, business cannot grow through cost reduction and cut backs. The cross-pollination of ideas is essential.

Product management is demanding because there are so many disparate skills required, from high level strategy to the granular detail. That’s why they’re often likened to mini-CEOs; they are ultimately responsible for the commercial outcomes and profitability of their products.

Product managers are leaders, influencers and drivers. It is their responsibility to have an intimate knowledge of the features, benefits and capabilities of their products. They’re responsible for the complete product lifecycle and for understanding the customer, market, industry, competitive landscape, regulatory and technological trends, and best practices.

Product managers have to lead multi-disciplined teams and manage stakeholder expectations. They must make tough decisions often, particularly when trying to predict the future of a changing and uncertain world where there are no right or wrong answers. Their job is to make intelligent decisions about product evolution, so it’s essential they demonstrate a logical and pragmatic approach to innovation and that’s why they are worth their weight in gold.

Sally Mills is CEO of executive recruitment firm LaVolta. #