In Innovation, Good Enough Is Good Enough
By Jeffrey Baumgartner
They way people in big organisations and entrepreneurs attack new product ideas is very different. Big organisation people prefer to perfect their ideas before launching them. Entrepreneurs prefer to get to market as quickly as possible with good enough ideas. If you are an innovation leader in a large organisation, understanding this difference and getting your team to behave more like entrepreneurs can make all the difference between product innovation success and failure.
A couple of months ago, a middle-aged friend of mine, who has spent his entire professional life in the corporate world and is between jobs right now, came to me with an idea for a service he reckoned we could develop together. I told him it was a great idea and I knew we would have no trouble implementing it in practice. The real challenge, I explained, would be in promoting and selling the service. I asked him if he had thoughts about how we would do that and suggested he might be able to tap into his corporate network. He said he could do that, but he would need to refine the idea rather more first.
In that time, another friend who is a consultant and coach, has designed and run her first two webinars as a means of generating new business leads. They were far from perfect, but she took loads of notes after each and will use this to make future webinars better. She also has two potential leads.
These two friends' stories illustrate two big differences between how people in the corporate world treat innovation and how entrepreneurs treat innovation. Firstly, there is a tendency for corporate people to want to make everything perfect before they implement their ideas and introduce them to the market. Secondly, they underestimate the challenges of marketing and selling all new products and services.
Perfectionism Versus Good Enough
Corporate people tend to want to perfect their ideas before launching them because they do not want to risk making a mistake. They do not want to take the blame if things go wrong. For them, the consequences of making a mistake are perceived as less severe than the consequences of missing out on an opportunity. If they miss out on an opportunity that only they know about, they still have their jobs. On the other hand, if they launch a new idea that does not work out, they could be reprimanded.
Entrepreneurs, on the other hand, often do not have the time and resources to get everything perfect. While Silicon Valley has created the image of entrepreneurs being given huge sacks full of cash by venture capitalists, the truth is most new businesses are boot-strapped; that is, they are funded by the founders' savings and perhaps some loans or small investments from friends and family. Funds are limited and most entrepreneurs cannot afford to take the time to perfect a product or a service. They need to get it to market as soon as possible so they can start making sales.
The successful entrepreneur knows that when a product or service concept is good enough, she should make it available to customers. She can refine it and improve it later after she gets feedback from clients. If the new product is software related, such as enterprise software, an app or a web based business, the entrepreneur can easily release updates to fix bugs that customers discover. If the new product is a service, it is easy to amend the service based on feedback.
Getting to Market Quickly
Another advantage to launching an idea when it is good enough is that it ensures you get the idea to market before your competitors do. For example: Alice has an idea for a smartphone app that allows people to make emojis based on their cat or dog. Just photograph your pet's head and the app creates a range of funny emojis using the head. However, she wants to perfect the app before putting it to market. She keeps seeing things that need to be fixed. She continues to have ideas about making it better. While she fusses over perfecting her app, Betty develops and makes a similar app. It is not as comprehensive as Alice's and it has a few bugs, but it is good enough. Betty launches it and promotes it heavily. Her product is an overnight sensation! Alice reads about Betty's success with a similar product and realises she needs to put her product to market too. But, when she does, the public assumes it is a copy of Betty's product and there is little interest in Alice's product even though it is actually a better, more comprehensive product.
Consider how different that story would have been had Alice launched her product when it was good enough.
And Leaving It Quickly
If you discover that good enough idea is actually not that good, you can reject it and develop something else. Because you have spent less time on the idea, than you would have done had you perfected the idea before launching it, your sunk costs are lower; there is less loss. Perhaps, more importantly, there is less emotional attachment. When you spend a long time perfecting an idea, you inevitably become emotionally attached to the idea. This makes it difficult to judge the idea objectively and even more difficult to let go if the idea proves less than viable.
The second difference between how corporate people and entrepreneurs treat innovation is that entrepreneurs tend to be much more aware of the challenge of marketing and selling a new concept. Friends, from the corporate world, education and the arts, often come to me with great ideas that they believe I can deliver as professional services. When they tell me their ideas, I listen and, if I want to have an honest conversation, I say something like, "That's a great idea and I could certainly do it. The challenge is in selling it. My reputation is in the field of innovation, not language training [for example]. How do you think I could promote and sell this idea?" Usually, these friends cannot answer this. They have no experience selling their own products or services and fail to realise how challenging it is.
The thing is, I could make almost any idea happen. You could too. Want to make an oval shaped mobile telephone? No problem! We can find a manufacturer on Alibaba, send them the specs and some money and they'll make us a prototype. Once we're happy with it, they'll manufacture them for us. We just need to sell them. That's the hard part.
Do you think I would make a great marriage counselor? Sure. I could do that. I am good at listening. I could put together a web site, get some training and launch this new business. That stuff is easy. Selling the service is the challenge. Not only do I need to communicate to a specific group of people, I need to convince them that I am a better marriage counselor than the many established competitors. That requires a marketing strategy, sales strategy and a lot of work.
Great Ideas Are Useless if They Cannot Be Marketed
Entrepreneurs understand that great ideas are useless if they cannot be marketed. They know that a new service that widely differs from their existing services will be particularly hard to market because the idea is outside their realm of recognition. Just as Coca-Cola would find it difficult to launch a new division selling LED televisions, a change management consultant would find it difficult to offer a new service in foot massage. In fact, the management consultant would find it even harder to launch her new service because she has fewer resources than does Coca-Cola.
If you are an entrepreneur, this is nothing new. You are used to implementing ideas to the point of good enough rather than perfection. You understand that the cost of a mistake is much lower than the cost of a missed opportunity. You also know that no matter how brilliant an idea is, if it cannot readily be sold, it is pretty much useless for you.
Lessons for the Innovation Leader
If you are an innovation leader in a large organisation, there are three lessons to be learned from this.
First, launch new ideas when they are good enough. Fix them when you get feedback. Dump them and try something new if the ideas do not work out. Google, Facebook, Amazon and a few other big companies that continue to innovate successfully do this all the time. Remember Google Glass? It was meant to be the next big thing in technology. It did not really work out. Google seems to have dropped the idea or put it on the back burner and is exploring other ideas.
Secondly, ensure your team understands that lost opportunity is more costly than making a mistake and fixing it. This means that when people make mistakes, do not focus on blame, focus on fixing it quickly. Make it clear that you do not care who is at fault when mistakes happen. You care a lot about who fixes those mistakes and how.
At the same time, when competitors launch new products and services, ask your team if they were developing similar ideas and, if so, why their ideas were not developed to marketability faster. Again, do not blame. Learn and apply what you learn to future new product and service ideas.
Thirdly, a critical criterion for any new idea is its marketability. If a brilliant product idea is too far removed from your organisation's strategic vision, line of products and way of doing business, you either need to modify the idea substantially or you need to dump it and think again. Don't waste time on ideas that your company could not realistically sell.
Want to Discuss This With Me?
If you enjoyed this article, please share it with your followers:
Questions you should ask when an innovative project fails
You can learn a lot from the failure of an innovative project, but you need to ask the right questions. Here are those questions. -- Read the article...