It is very important to balance innovative bets in product development projects, using Rosabeth Moss Kanter’s innovation pyramid. Especially effective is the Lean Canvas, which through nine aspects of the product, allows the innovative bet to be weighed. The higher the challenge, the more non-product feature-related aspects such as sales channels can be equally important.
I am following a high-tech company in developing mechanical and electronic hardware products with integrated software and connected to their cloud platform.
It is a great challenge for me to guide them in adopting the ways in which the best companies in the world develop products, and which make them so different from most other companies.
The pyramid of innovation bets and the Lean Canvas
With the company, we are considering how to balance the level of innovative challenges inspired by Rosabeth Moss Kanter’s innovation pyramid from Harvard Business School where:
- At the lowest level are positioned the incremental development projects of existing products for the company and the market
- At the intermediate level are positioned the product development projects that the company does not have but that are available in the market
- At the highest level of bet the products that are not available in the market and that the company could develop.
It is clear that the level of risk is increasing as these bet levels increase, and it is clear that it is appropriate to balance the few large bets in the portfolio with the medium bets and the more numerous low bets to improve one’s innovative effectiveness.
We worked on a product, very promising from a marketing analysis perspective, and positioned at the second level of the pyramid, employing the Lean Canvas.
Involving the head of engineering or technical leaders in the drafting of the Lean Canvas along with market people such as marketing and sales allowed for the construction of a unique value proposition that was different from what was initially thought.
This has happened to me several times with the teams I have followed, and I was not surprised.
In this case the difficulty that emerged was related to Channels to the Customer.
The product the company was considering was competing with that of well-positioned competitors in their markets.
The company is not structured with an adequate sales network for those markets.
The president of the company has formulated a summary that I agree with very much and which I summarize as follows:
No big bets are made on niches. It is easier to acquire those operating in the niche than to compete in the niche.
The priorities of the product development project portfolio
So in the overall analysis of the project, the development priority of this product absolutely had to be compared again with that of other products, for which it was decided to employ this very effective tool.
The strength of the Lean Canvas is that it leads people to consider 9 fundamental aspects of the product.
Technical features are where we focus most, but, as I have often experienced, other factors are more relevant.
In my experience, in the case of very innovative products for the company, I have come up against the need to find new sales channels a few times, as happened with this client.
In my last company experience, there was a case where the need to find new sales channels only emerged after the product was completed.
These were a real surprise, because when faced with a truly innovative and sustainable technology of our product, the market was very cautious.
After the initial discouragement, we realized that we needed to change the business model, initially offering a manufacturing service to demonstrate the effectiveness of the product before moving into direct sales of the machines.
This new business model is showing results.
I remember participating in or attending the drafting of at least 70 Lean Canvas, and I can say from experience:
All cases in which with an unfavorable Lean Canvas product development was initiated, the commercial result was modest.
Unfortunately, not all those with a favorable Lean Canvas have then delivered on their promises, and for this reason it needs to be updated consistently during product development.
