Killer Innovations

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So what's the real difference between a professional and an amateur innovator?  Amateurs are one-hit wonders.  They get lucky with one product idea and then you never hear from them again, while a professional innovator produces a regular stream of killer products.  Are you a professional or an amateur?  I'll be right back.

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This is the Killer Innovations Podcast with Phil McKinney.  Keep in mind that the information and opinions expressed in this podcast are Phil's and Phil's alone and they don't necessarily reflect those of his past, current, or future employers.  Now, here's Phil McKinney.

So you've listened to more than 40 hours of content on the Killer Innovations Podcast.  You're created killer ideas.  You've secured your management team's support for those ideas, and you're about ready to launch that new killer product.  All of a sudden you look back and realize that your innovation funnel is empty.  You've got the one product that you're focused on, but nothing has happened to fill that funnel to ensure a steady flow of killer products.  If you want your management team to support this innovation fad that you're on, you need to deliver more than just one-hit wonders.  So what's missing?  What are you missing as a skill set or as a tool or process?  You kind of need to be like that juggler that's bouncing plates on the end of the sticks.  As he starts to do plates, he has to constantly run back to the previous plates and keep them spinning.  If he is too focused on getting new plates started, older plates will fall to the ground and break into a thousand pieces.  At the same time, if that juggler is too focused on keeping all the plates spinning on top speed, he'll be too slow in get even more plates going.  In this podcast, let's limit the discussion to the flow and not to the process. That's been covered in a previous podcast where I talked about gate milestones.  In this podcast, I want to talk about not letting yourself get so focused you ignore the big picture.  Now every one of us gets focused on the current killer products and we forget to keep the funnel filled.  Keeping the funnel, the innovation funnel, is critically important to have the next idea. For some reason, we just – as humans we get focused on the current task that is right in front of our face.  We're working on that next killer product, they're probably in trial stages, we're getting ready to launch this, this is going to be the big win, this is going to prove to management that you've got this innovation thing figured out and that you can deliver significant revenue and margin growth for the business.  But you deliver this product, the question that management's automatically going to ask you is where's the next one?  So what is the optimal funnel flow?  How many products or ideas, programs, should you have going through your funnel to make sure that you've got a consistent flow?  Well, that depends.  It depends on your budget.  It depends on your staffing resources, how many people do you have?  It depends on your organization's ability to absorb new products.  And there's a mix to these numbers.  You may have lots of dollars; you may not have the staffing resources through using outside contactors.  Fine for the short-term, not great for the long-term.  The organization's ability to absorb new products, it could be just one right now to kind of teach the organization the effort that it needs to get one fundamentally new product into the market.  The objective has to be to increase that capacity, so your capacity today may be different than your capacity for this funnel going forward.  The PDMA, or the Product Development and Management Association now – I'm going to put a little side note here – if you're not a member of the PDMA, you should consider joining.  It's a great organization; it brings together a lot of people who focus on the processes and the metrics of developing and designing fundamentally new products.  The PDMA does this report on a regular basis to try to gather kind of what is best in class statistics for coming from idea to commercial product, and the most recent PDMA study it says it shows it takes 11 ideas to generate just one commercial success.  And that's 11 qualified ideas.  So 11 ideas to generate one commercial success, so how does this funnel break down?  You need 11 qualified ideas that turn into three that actually enter development, meaning you're actually going to build a product that turns into an average of 1.3 – I don't know how you get to a .3 of a product, but the numbers are 1.3 make it into launch, but only one becomes a success.  And in my experience it takes 10 concepts to get to one qualified idea.  You've got to kiss a lot of frogs to find the prince.  So it takes 10 concepts to get to one qualified idea.  So if your objective is to launch one successful product per year, this is the statistics you need for your funnel.  You need 110 concepts.  Roughly 10 per month.  That turns into 11 qualified ideas.  One per month.  That eventually turn into starting the development of three to four, which you need one per quarter.  And you need to launch one to two fundamentally new products; successful launches, which means you have to deliver one per six months with the anticipation that one of those is not going to actually be successful, so launch does not equal success.  Remember the objective we set here is, is launch one successful product per year.  One hundred and ten concepts turning into 11 qualified ideas that turn into three to four that actually go into development phase which allows you to launch one to two per year, which translates into one successful product per calendar year.  Now, let me ask you a question.  If you look at your typical day, week, month calendar, your schedule, your DayTimer, your Outlook calendar, are you utilizing your time to hit these targets?  Are you really looking at 110 concepts of ten per month?  And this isn't just simply a one-liner on a piece of paper.  I mean really understanding these concepts that ultimately get into being a qualified idea.  Are you really hitting these statistics?  You can look in your calendar and based on where you assign time; that tells you where your focus is.  If most of your calendar is focused on the one commercial product that you're working on right now, you're ignoring your innovation funnel.  You're going to be that one-hit wonder.  How do you get that funnel going to keep going so that you've got that continuous stream of innovations?  The other risk is that once you qualify an idea you don't kill it.  The funnel will not work in your favor if you neglect it.  So what happens?  Why do people not kill it?  Well, it seems more important to go back and keep the front of the funnel filled.  That's kind of this perception that people get – I'm either focusing on the back end of the funnel, launching commercial products, or I'm gathering concepts, turning them into ideas in the front end of the funnel, and where we tend to have a lot of neglect is right in the middle of the funnel.  What happens is that you clog up the funnel – you get this big bubble of things that are in the funnel, they're qualified ideas and/or you started the development efforts and that bubble gets to the point where you pretty much bring everything to a screeching halt.  Remember, the objective is deliver one commercial product each year.  You've got a trend you've got to prune through the entire process.  The other risk here is that you end up launching some not so great products.  They've gotten through the funnel, they've satisfied the requirements to get into the funnel, you've neglected the middle of the funnel and then all of a sudden you've got products that are going into launch phase that really aren't that great.  You need to stay focused; you need to manage that funnel effectively.  You've got to prune, you've got to get the numbers down.  If all of a sudden you're seeing where you've got a dozen really good ideas and you have two-dozen in development, that's a problem.  If you've got a dozen qualified ideas you should be down to three or four that you've got active resources developing on it, and you should be looking at one launch every six months and pumping that out in order to hit your objective.  You've got to really be disciplined on funnel management.  It's not one of those things (and particularly if you're a much more of the creative type) that you're going to be good at it.  If you're not good at it, hire somebody who is.  And this applies to whether you work for a large corporation or you're generating your own ideas.  If you're an individual innovator and you're coming up with products and ideas or you're starting a business and you're looking for that first product, then you gotta look at a lot of concepts, you've got to develop a lot of qualified ideas, you've got to start the development process if you're going to deliver those one to two products every calendar year.  So these same statistics applies whether you're a Fortune 100 company or you're a small and medium-sized business.  What does change is the size of the ideas.  When you're a large corporation, you've got to have big ideas, ideas that are going to move the needle on the revenue and margin.  So it's all relative to scale, but the sheer number of ideas that you have to look at doesn't change a whole lot on whether you're a large enterprise or you're that small and medium sized business.  So what are the key things to keep in mind?  First off, set targets for each stage of your innovation funnel.  That includes concepts, qualified ideas, how many of them enter the development phase and how many do you commercial launch?  Set targets.  Ensure the time and resources are properly allocated to each stage of the funnel.  If you're a small company and you're the one person driving the innovation, look at your own calendar.  If you've got a team of people who are focused on helping to drive an innovation change within your organization, make sure that their time is prioritized to keep the funnel active.  Next, measure and track and adjust and tune the targets to meet your objectives.  If your objective is one killer product every 12 months, you can adjust the statistics based on the size of ideas, the how many concepts you've got, how many qualifying you've got.  The key though is set the bar, measure it, and then adjust.  And then lastly hold regular audits of the funnel and check how many concepts do you have under review, how many qualified ideas do you have, what is your idea mortality?  Are you killing your ideas fast enough?  Don't get emotionally attached.  Don't let your team members get emotionally attached.  What is your idea mortality?  If your idea mortality from the time of qualified idea through delivery is low, let's say 10 percent – which actually is the average that I come across when I talk with organizations is they'll kill off about 10 pecent of their ideas.  Well, what does that tell you?  Is if I put more ideas in it and I only kill off 10 percent I'm going to have a bubble effect.  More than likely I'm letting in poor quality ideas into the funnel, which are eating up resources that could be better allocated to really knocking it out of the park.  Now, if for some strange reason you just have a wealth of really, really great ideas that's fine; then change the metric.  Should you be doing one new product a year or should you be doing two new products a year or three new products a year?  And then adjust.  But stay in touch with that.  Don't let the metric get set and then ignore it.  Adjust based on market conditions, and based on the level of investment your company can make, the amount of resources that you're assigning to innovation programs.  Adjust your target.  That's why I've kind of limited it to one per calendar year because that actually is a very aggressive target that you have to hit.  So, again, what are the key things that you have to keep in mind?  Set the target for each stage of your innovation funnel, next ensure time and resources are properly allocated to each stage of the funnel.  Third, measure and track and adjust and tune the targets to meet your objective.  And then lastly hold regular audits of the funnel and check concepts under review, how many qualified ideas, your idea mortality, are you killing off your ideas, and then what's the successes?  Are you really getting killer products into the market?  If you ignore your innovation funnel, you will be the one-hit wonder.  You will be that amateur that maybe gets one product out but you're never heard from again.  If you use a good funnel of management process, you will consistently deliver killer products and you will be that professional innovator that management turns to when they need those products to help drive and grow their business.

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This week's "Killer Question" is about the innovation funnel.  So what are some questions you can ask yourself, your team, and your executives, your management team, to gauge how you're doing at measuring your innovation funnel?  So the first question:  how frequently do you inspect your entire innovation funnel to ensure a regular flow of killer products?  Do you do this annually when you're doing the annual business plan?  Do you do this quarterly tied to the fact that maybe you had a bad quarter and budgets are being cut so they're looking for programs to kill off?  Or is this a regular process that the team looks at and it's really about making sure that you're delivering those killer products?  So don't get focused on just what the timing is; but what's the real motivation?  Is the motivation tied to being able to put it into the annual report that you’ve got this innovation funnel?  Or, the fact that you're looking for what the programs for the annual planning process is?  Or are you tying it to the quarterly numbers and the budgets are getting a little tight so they're looking for programs they can kill to save money on?  Or is innovation really a core part of your culture and you're using this review process to measure and track and to make sure that you've got a rich funnel of killer ideas coming down that pipeline that will translate them into killer products and services?  So how frequently do you inspect your entire innovation funnel to ensure a regular flow of killer products?  And next how often do you realign the innovation pipeline to current market opportunities and/or business priorities?  So let's face it, market changes, business priorities change, so how often do you realign the innovation pipeline?  Now the key here is is don't get stuck emotionally just because you've invested X number of dollars or X amount of time.  If the market conditions are telling you something different, if the business priorities for your business have changed, you need to adjust, you need to be willing to kill products or ideas that are currently in the pipeline and reallocate those resources and reallocate those dollars towards the new target.  And this should be done quarterly as part of the funnel review process so what products or ideas are being added?  Which ideas are being progressed to the next stage and which ones are being pruned or stopped or killed?  Make sure that you have complete transparency on this entire process.  Let management all the way up to the top see the process that you're applying.  In my history and my experience having complete transparency helps when you have those discussions with your management team about making the right decisions.  So, again, how often do you realign the innovation pipeline to current market opportunities and/or business priorities?  Are you doing that annually – that's the wrong timing.  Do you do it quarterly?  That's probably about the right time to think about re-evaluating your funnel and re-evaluating the priorities.  If you wait and do it annually it's too long of a time from the time the idea gets generated until it goes through and you re-review it.  Particularly if you are in a fast moving industry where things change on a regular basis.  You need to stay in tune with the market and you need to be willing to cut prune and reinvest.  Now, here is my other word of caution here, though, is don't be too quick to prune because then what happens is you thrash your organization.  Start/stop, start/stop, start/stop distracts the resources and actually sends the wrong message to the team that management isn't serious about actually seeing ideas all the way through.  But at the same time have to be willing to be honest with yourself and reevaluate your funnel on a regular basis.

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This week's closing thought is about questions and asking the right questions.  Now, as you know, I'm a big believer in asking questions.  In fact, the whole basis of Killer Innovations and the Killer Innovations methodology is about asking the right questions to help change people's perspectives to come up with better ideas leading to better products.  Now over the years I've found it easier to get people to embrace an idea or a need to change directions by asking the right set of questions.  Now questions are powerful tools.  They really get the mind to change perspective, to help drop the bias, to entertain a different view, to create new ideas.  The alternative would be for me to tell somebody what the answer is.  And to either try to convince, coerce or bully them into agreeing with my perspective and my answer.  In the process of asking the question, you might be challenged yourself to change your perspective.  James Thurber said it best, "It is better to ask some of the questions than to know all of the answers." 

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So what did you think of this week's podcast?  Did you find it helpful?  How have you applied the Killer Innovations concepts to your innovation activities?  Send me your feedback and the answer to these questions to podcast@killerinnovations.com.  Also, if you belong to LinkedIn send me an invite, but note in the invitation that you are a listener of the podcast and I will accept, as I get lots of LinkedIn invitations of which I decline 90 percent of them.  So, send me an invitation via LinkedIn and we can connect our networks and stay connected that way.  But please note that you are a listener and I'll accept that invitation.  Also, I want to encourage you to participate in the Killer Innovations Community.  Go out to killerinnovations.com and click on the "Community" tab and participate in the conversations that interest you.  But contribute and participate.  If you've got an answer or an idea or you can help somebody in the community with their killer idea, jump in and help.  Read the blog – if you haven't seen the blog or you haven't gone out and read the blog lately go out to philmckinney.com and I'm posting content out there including PowerPoint presentations; I just posted a video where I was on a panel talking about innovation, so things that I don't normally cover in the podcast I will cover on the blog.  So go out to philmckinney.com.  Also, share the podcast with others – all I ask is that you share with others as your way to pay it forward just as I'm paying it forward with you in producing the podcast and just as an early mentor in my career paid it forward to me by investing time and mentoring me earlier in my career.  So share the podcast with others.  For this week, fill your personal innovation funnel.  Come up with ten concepts this week and narrow them down to one killer idea that you're going to move forward, so here's the task for this week.  Fill your personal innovation funnel with ten concepts, and by the end of this week narrow that down to the one killer idea that can result in a killer product from you.  And we'll see you next week, bye-bye.

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