New Product Innovation Russian Roulette

One bullet, five empty chambers: is new product innovation really that dangerous?

Yes and no.

Russian RouletteThe analogy with Russian roulette is a bit strained, because most marketers would be delighted to get those odds: The rate of failure is much higher. And one new product failure is rarely fatal to a company, however painful it may seem at first.

In fact, the company that survives a new product disaster should plunge back in right away. Fall off the horse, get back on the horse.

But macho bravado can have unintended side effects: Companies may give themselves permission to be reckless. Some victims of testosterone poisoning take half-baked ideas (disinfectant toothbrushes, anyone?) to the market, high on a cocktail of fatalism and wishful thinking. (“Hey, it just might take off despite bombing in those focus groups but, in for a dime, in for a dollar, and what the heck, most of these things are expected to fail anyway.”)

Wrong-o. An attitude adjustment is needed: Yes, your odds can be improved.

Every year, tens of thousands of “new” products are launched, some with great fanfare, some with a whimper. And year in year out, thousands die. Some are just victims of poor timing. “It was ahead of its time” is a small consolation prize for bruised egos.

Volumes are written about how to do new products. Pricey “everything you need to know” seminars are offered. Corporate culture gurus promise to create the “skunk-works” environment and team attitude that will yield winners. Consultants and agencies (like, well, us) are glad to become adjunct staff to do it for you. Still, even with experienced, uber-smart help (like, well, us) it’s a high-risk, high-reward investment.

It’s a good thing we’re not playing with our own money.

Sorry to say, that’s wishful thinking. (Wishful non-thinking?) Every penny deployed against new products is a penny unavailable to build equity in an existing brand. A successful new products effort, on the other hand, is no doubt vital to the long term vigor of your company.

Sleepy companies milking mature brands are more at risk than they realize. Corporate hardening of the arteries can be as deadly as front-page new product disasters. Not moving can be a dangerous move.

So. Let’s improve the odds.

First, let’s agree to a common vocabulary.

When we say new products, we mean really new. Some people place offerings of line extensions on the altar of New Products and wonder why the gods get angry. Of all the “new” products introduced each year, only a handful are truly new, original concepts. A new package, a restyled logo, a bigger size may buy you some time with shareholders or investment bankers, but they don’t fool the trade and they don’t fool the consumer. They only fool the soon-to-be-former head of new product development.

A line extension pales as a new product when compared to a much bolder stroke, like taking a brand name into an entirely new category or an entirely new use.

A brand extension, if done right, is a way to transfer the equity of a brand across category boundaries and user universes.

An attribute is a characteristic of a product, existing or new, such as what it looks like, what it does, how it does it, what it’s called, who uses it, or who might use it, its color, texture, smell, sound, etc., etc.

Killian’s rule #16: The fastest route to new product failure is to rely on a single changed attribute.For that to succeed, it would have to be one hell of a strong attribute.

It rarely is. If it’s price, for instance, it doesn’t create a very sexy new product concept. Too many “new” product efforts are nothing more than me-too’s at a lower price point. Granted, there is money to be made with the “second into the market” philosophy, but the time lag raises expectations: When all you deliver is low price (and a transparent lack of creativity), you crash. Bailey’s Irish Cream was a hot new product, creating a hot new category, of which it had a tidy 100-share…. Its success generated 38 competing brands, and Bailey’s share dropped to 50% … but nobody wrestled away their leadership, and most of those 38 mice died off quickly. Not all pioneer brands are so lucky… but by and large, staying power belongs to real brands.

For many manufacturing-driven firms, the development of new products consists of 1. Can we make it (without too much capital expense)? and 2. Will anyone buy it? The old cure-in-search-of-a-disease trick, aka the General Motors Slow Death Spiral. Sometimes it works, usually it doesn’t. We’ve all known firms saddled with mountains of boomerang “we-know-how-to-make-this” inventory.

Still other deep thinkers, from the opposite corner of the solar system, say “Let’s talk to consumers and find out what they want.” So they launch the Qualitative Research World Tour. Consultants provide a Proprietary Methodology (always with a cute catchy name) and our friends at focus group facilities across the country rub their hands together with delight, because the secret sauce of these methods is to hold a focus group, learn a little, change the questions, hold another focus group, rinse and repeat until the research budget, the travel budget, and the participants are exhausted.

Part of the problem is that undisciplined, free-wheeling discussions rarely yield a gem of a new product idea. A blind pig will find an acorn every now and then, but not often enough to feed the piglets. The real problem is that consumers cannot react to abstractions. If they could, they’d all be artists and poets. You can read more in our White Paper diatribe against focus groups.

A more sensible approach to new products starts with ideation sessions built around the development of Attribute Clusters.

Start with ideation group sessions, in-house but off-site, away from daily office routine. (Ever wonder why so many tales of great new product successes start with either “he developed it in his garage” or “she thought of it while jogging along the lake”? Could it be the absence of ringing telephones?)

Aim for diversity: Consider people from Sales, Operations, Finance, Research, Packaging, Marketing, Reception. One or more of each flavor (except, please, Legal). Don’t talk about what you can make. Talk about what people might need that is even remotely related to your products or services. In any part of their lives. Ask what would the thing or service do? Look like? How would it be used? By whom? What would it cost? Where would you buy it? What effect would it have on the people around you? (Empower people, and you’ll be amazed at who makes big contributions.)

Forget whether it is feasible, whether the technology exists, whether it has ever been done before. Go for a high volume of ideas, with no nay-sayers allowed. There’ll be more than enough of them later.

What you build over days (yes, days) is a list of attributes for “what if” products. You have been forced to think more about what something does (benefits) than what it is (existing category definitions).

Now you test your hand/eye coordination. Begin to combine attributes into clusters. Combine two, three, twelve. Sort. Re-sort. Build “recombinant” product concepts. Try to come up with as many as possible. You can even subtract from the concepts: Pull an attribute or two out and see what happens. Is it clearer? Is it worse? Is it exciting? Is it soup yet?

Then flip the coin and try overkill. Take a concept that makes sense and heap other positive attributes on top of it. Add two. Add twenty. See what happens. Does it become stronger? Unfocused? Silly?

Then, an important gut check:

Did you risk ridicule by going too far, by coloring outside the lines? Did you actually go far enough to get some really silly ideas? Did your group(s) take wild chances? Did they suggest both products and services? If the answer is a big Yes, you’re doing fine. But if every concept sounded reasonable and sensible, you may have wasted your time.

After this exercise in mental and product development gymnastics, you are left with stacks of attribute clusters. Dismiss the committee with thanks, and get ready to turn a corner, for now is the time to turn your clusters into brand concepts, words and pictures that consumers can react to. It’s not as easy as it sounds.

Faced with a stack of umpteen attributes, the challenge is to distill them down to a few sentences of consumer speak and a key visual representation, usually a package design. After all, you are ready to show these to people who really don’t care about the process as much as you. No, not the Operating Committee. Consumers. Groups of people you may not hang around with on a regular basis. People who may or may not be articulate enough to blurt out “I agree with Al” under the pressure of repeated probing.

Keep the verbal portion of the concept plain and simple. Spend twice as much time on the visual representation because the visual is more evocative than words. In show and tell, Show always beats the hell out of Tell.

Your mission is now to find … Language. Find the words consumers use to love or hate an idea. Listen hard for what they can grasp, and like. Listen just as hard for what they don’t get and say they wouldn’t buy. Find out why. The reason they won’t buy a product or service is often more telling than the time-honored focus group wimp-out, “Yeah, I like it, too.”

But remember, you are the final judge, not them. Powerful brand ideas have died on the viewing room floors because Al was bullied in kindergarten by a kid wearing a purple shirt, so he hates purple.

Now show them the attributes, written on big index cards, one to a card, and ask them to do two things: First, add attributes that may be missing. Give them a fill-in-the-blank statement such as “Introducing a new _____ that is _______.” Ask them to abandon common sense as they dream them up.

Second, let them create an ideal product. Have them do this by grouping the attribute-cards. Not just one or two, all of the ones they want, piled on in order of importance. Listen to the language of group negotiation as they weigh these attributes.

With any luck (arguably an important element of any new product development process) you’ll have concepts to develop.

Then comes a crucial stage in the process: Sticking to your guns. Concept Killers are everywhere, smiling. They wait behind office partitions for you to return from your expedition. They use friendly advice as potent weapons. They know what you’re working on won’t work because it was tried before. Because it’s never been tried before. Because it’s not Our Basic Business. Because it’s purple. Because the Boss’s Wife thinks it should be sold in quarts. Because the competition could knock us off in a minute. Because …

Hang in there.

It takes a certain amount of stubborn vision to give birth to a truly new product, even more so a new category. It’s human nature to deal with the New by demoting it to the Familiar, so you have to walk a tightrope to get people to say Aha! That’s New! without ever reducing it to “Oh It’s Really Just a ______ With a Different ______“.

Still, you’re almost halfway through the process, and it’s time for quantitative research, and a Brand Equity Plan for the new product(s). It’s time to plan for the seamless integration of brand assets, such as Product Name, Packaging, P.O.P., Ad Content, Reach and Frequency, Consistency of Message, Promotion, Pricing, Trade Acceptance and Support, Distribution Strengths, Sales Force Discipline and Motivation, Repurchase Patterns, Likely Competitive Reaction, Barriers to Entry, etc.