How to Focus Innovation

How do you start innovation? Often there’s a senior manager experiencing an urgent need for something new. A new competitor may have entered the market, turnover may have decreased dramatically or a big contract is lost. And something has to happen: we need to innovate. A special innovation project team is set up and starts generating ideas. However, an essential point is often missed: ideas for what? That’s the question!

Do you have a clear innovation focus yourself?

You should never start innovation unprepared. Good preparation increases the chances for success because it creates priorities, direction and the drive to succeed. That’s why it is essential to start with a clear and concrete innovation assignment. Starting with an assignment obligates senior management to be concrete about the criteria that must be met. This forms the guidelines for your ideation team when you are underway. In my new book 'The Innovation Expedition' there's a format to formulate a concrete innovation assignment in a innovation focus workshop with the help of the following six questions:

1. Why? (Why do we want to innovate?);

2. Who? (Who is the target group?);

3. Where? (For which distribution channels, countries, regions or continents)

4. What? (Evolutionary or revolutionary: products, services or business models)

5. When? (Intended year of introduction)

6. Which? (Which criteria should the new concepts meet?)

The purpose of an innovation focus workshop is to answer the questions above together with senior management. Often your board has not yet defined the criteria the new concepts should meet. Then it helps to ask some questions. In practice you will go a long way with the following eight questions:

1. Turnover. How much turnover must the new concept realize during the first three years? Or, if new products compete with existing products, how much extra turnover must be realized?

2. Profit. What profit margin should the new concept realize?

3. New. Should the new concept be new to the market, new to the country or new to the world?

4. Appeal. How attractive and pioneering to the target group does the new product concept need to be?

5. Promotion. To what extent do we want the product concept to create buzz and hype among potential customers?

6. Positioning. To what extent should the new product concept fit the current brand positioning?

7. Production. Do we produce the new product ourselves (with our own manufacturing facilities) or can we form production partnerships?

8. Strategic fit. To what extent should the new product concept fit the business strategy of the organization?

So in your discussion with senior management, you will collectively formulate the criteria for the new product concepts as well as determine the ambition levels.

Below, is an actual case from an innovation assignment for Sanoma Media Netherlands. Sanoma is a leading European group in the fields of media and learning. With operations in 20 countries and a turnover of around € 2.5 billion. Libelle and Margriet, two leading women’s weekly magazines in the Netherlands, are both important brands for the bottom-line of Sanoma Media Netherlands. Unfortunately, the market for printed magazines has reached its peak and is declining. That’s more than enough reason to look beyond the next 12-months. This is also why Sanoma wants to explore how to extend these popular brands beyond the current media market. Will it be feasible to use the Libelle and Margriet brands to launch new concepts in a completely new market? Sanoma drafted a very concrete assignment at the start of their innovation process.

Ideate new products and/or services for Sanoma Media to introduce successfully in the Netherlands; using the brands Margriet and Libelle in new or existing consumer markets with existing brand values for the present target group of women. We are looking for at least three new concepts which individually will realize an annual sales potential of € 25 million with a profit margin of at least 25 percent. The new concepts should fulfill a concrete need and be attractive, distinctive and reliable to the target group. They should fit the brand values of Margriet and Libelle. They must be feasible and the business risk should be within manageable limits. To realize the new concepts and increase feasibility; partnerships or joint ventures with other companies will likely be forged. Our aim is to introduce new concepts in the market within two years.

This innovation assignment is focussed. It states clear objectives and perfectly communicates the expectations of senior management to the members of the innovation team.

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Gijs van Wulfen is a LinkedIn thought leader on innovation. He recently published : "The Innovation Expedition, A Visual Toolkit to Start Innovation". Available at Amazon.com or Amazon.co.uk.

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Photo Credits: Flickr / Steven Jones