(By Rod Ebrahimi)
“When people think of innovation, they often think of Apple’s iPhone, Google’s Glass, and other shiny objects. But there is more to staying relevant and innovation than “eye catching” new products. Successful product innovation usually starts out with smaller, incremental work that address immediate business problems.“
The idea behind incremental innovation is simple: instead of thinking up and executing against audacious new ideas that are risky, you make small incremental changes to existing products and services. This method of user-centered design thinking applies to both startups and large enterprises alike.
As CEO of a financial services startup, because of inherent industry restrictions, I’ve had to balance the need for significant product or business changes with the need for smaller incremental innovation to keep us competitive. I’ve also had the opportunity to work with larger enterprise companies who have incorporated these principles successfully, even within highly regulated environments like financial services. Unfortunately, groundbreaking innovation is significantly more challenging to achieve within a regulated environment – and these are the industries where customers and companies could benefit the most from changes.
When people think of innovation, they often think of Apple’s iPhone, Google’s Glass, and other shiny objects. But there is more to staying relevant and innovation than “eye catching” new products. Successful product innovation usually starts out with smaller, incremental work that address immediate business problems. Here’s how startups and larger enterprises are getting this right:
Focus On A Single, Tangible Customer Pain Point
Any new product change or incremental innovation should start with a significant issue facing actual customers (real people you can recruit to use it today). Nothing else matters. If this customer pain point is tied to a P&L or bottom line then the business will be well aligned with your customers’ needs; succeeding will mean your customers succeed too i.e. the business needs will get addressed if the customers needs are met. Incremental innovations can start as simple as a better alternative to how your customers experience being on-hold (Jetblue now takes your number and calls you back instead of making you wait). By creating a simple well-designed stand, financial services startup Square transformed their existing offering into a complete point-of-sale register for retailers.
These customer pain points are easy to find and come from everywhere: customer support issues, competitive product traction and everything in between. It can be helpful to create a list and narrow it down to a few significant customer needs then explore each further. The smaller and more painful the customer issue the better. It’s easy to get carried away at this earliest stage, which is why saying “no” should be the default when identifying possibilities.
Begin Testing With Customers Immediately
Get actual customers to try things out as soon as possible. This is often the hardest part for companies, particularly larger ones that are uncomfortable sharing ideas that are still in-progress. Whether it’s a survey or a paper prototype, immediately starting to test solutions to pain points will uncover whether your approach actually addresses customers’ issues.
At ReadyForZero, we started testing our hypotheses by first observing how people were managing debt on their own (in the wild), once we had a good idea what people were doing, we built and tested various landing pages to measure interest around specific value propositions. If you are strapped for time and resources (who isn’t?), putting your customers in front of existing products on the market is an easy way to learn quickly without building anything. In our case, for example, we observed people using Excel spreadsheets to tackle their debt and finances. In the end, this will lead to a “minimally viable” offering that still addresses a customer’s pain point.
Deciding on the “what” is the riskiest part of any new innovation; if you can’t define a “workable minimum” for the project, it will always end up growing out of hand and ultimately “die on the vine”. Everyone should be involved in this phase: from CEO to business development, engineering and customer support.
Use Existing Product Anchors To Build From
Once a minimally viable product has been identified, designed and tested – at a basic level – you now have to bring it to life. The best place to start is usually with an existing product anchor. For example, we recently added credit score monitoring which fit nicely next to our acclaimed debt repayment graphs as the product anchor. This provides context for incremental updates as well as a foundation for future work if successful. Using an existing product anchor in this way ensures that we maintain context and provide a seamless experience without distracting customers from their primary objectives. See again “Square Stand” example above.
Measure Results And Repeat
Most importantly, once there’s something up and running (however small the initial effort), there needs to be a way to iterate using both qualitative and quantitative data. What does engagement look like? How is it measured? Are customers paying for new services? Are customers satisfied? What costs have been reduced? This data should be easy to access and readily available to everyone involved. Every company is different but without a way to measure success, it’s not worth doing.
Incremental innovation is a way to better serve customers and partners without having to tackle the next big thing all in one go. What do you think?
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”