The Path to Better Breakthroughs

Innovation with a Crash Helmet enables fast failure

By Eric Mankin

November 2002

The key to successful breakthrough innovation lies in learning constantly from the bumpy ride. 

Traditional product development races steadily along a linear track toward a pre-defined formal launch date at the finish line. At that moment – and not until that moment – will ultimate success or failure be revealed. 

Effective breakthrough product development is different. The breakthrough race is around a circular track – it’s an iterative rather than a linear process.  Within this race, the winners, paradoxically, are the companies that can fail early and learn quickly from their mistakes. They then can come out with a product or service that incorporates this new learning.   

What defines a “breakthrough”?

The fundamental distinction between a platform or line extension product and a breakthrough product is that the latter establishes a need by its mere existence, or establishes an entirely new product category.  Demanding high-tech professionals didn’t know they needed a Palm Pilot until the handy tools became available. When Procter & Gamble’s PertPlus arrived on the scene, few customers had ever seen a need for a shampoo-conditioner combination; now there are few hair-care lines that don’t include a similar product. 

In an increasingly competitive landscape, more and more companies are looking for “breakthrough” products to offer greater return on research investments. Since breakthroughs typically open new markets, they translate into longer-term earning potential. Recognizing this potential, companies such as GE and Texas Instruments have been recently increasing their spending on innovation while other areas of their businesses continue to feel the pressure of a difficult economy.

Yet despite this pressure, very few organizations are actually good at delivering breakthrough ideas.  Primarily, one of two things will happen – an organization either fails to launch (kills a potentially good idea before it gets to market) or launches a failure.  What’s frustrating about these failures is that one never really knows if an aborted project might have succeeded, and in many cases, ideas that initially fail are later successfully launched elsewhere.  

For example, while P&G’s PertPlus dominates the “two in one” shampoo category, Unilever was actually the first company to have developed the “two in one” technology.  At the time, however, Unilever had a “linear track” mindset, and positioned the benefit in economical terms – having a shampoo and conditioner together is less expensive than buying one of each.  P&G positioned the product as a time-saving convenience, which turned out to be successful.  If Unilever had been practicing innovation with a crash helmet, it would have been able to capitalize on its technological breakthrough to succeed in the market, by continuing to experiment with its product’s positioning even after the product had launched.

Why bad things happen to good ideas

New product development traditionally is borne of product line extension or refinement. In this scenario, the product development approach is linear. For example:

1. Idea generation or invention
2. Concept and market feasibility
3. Capability development
4. Ramp-up
5. Launch.

This is an established approach that works well in developing products geared to enhancing existing offerings or fulfilling existing needs.  However, since breakthrough products fundamentally change the market and competitive landscapes, this approach won’t work. For example, customer research for breakthrough products will often be misleading, since the new product will appeal to new sets of customers whose needs, habits, and attitudes will change as a result of the new product’s existence.

Fast Failure: Innovation with a Crash Helmet

Instead, the breakthrough product development process should be cyclical, allowing the opportunity for early failures and multiple iterations of the product leading to a successful end product.

Idea Generation

Prototype Development

Controlled Launch

Feedback

Refined Idea

Prototype II

Controlled Launch

Feedback

Refined Idea

…repeat…

By introducing prototype testing and controlled launches into the process earlier (and anticipating that these activities will be repeated) a business can identify failures much earlier in the process, saving time and money.  Also, ideas that would have otherwise been aborted early, because they might fail, will have multiple opportunities to succeed. The cost of failure is less if you fail early.

A core component of Fast Failure is the need to accept and expose the imperfect.  Because product development has so long been seen as a linear process, this could be a difficult change for some organizations. In breakthrough product development, companies will ‘launch’ a product that may crash, but rather than perceiving this as the end of the process, for a breakthrough product, this might just be the beginning of the cycle.

One of the most important insights in the Palm Pilot’s development came after one of its early ancestors, the Casio Zoomer, failed in the marketplace.  Following that failure, the executives of the company that would become Palm commissioned market research to understand how the few customers who had purchased the Zoomer used it.  While the executives had positioned the Zoomer to be a substitute for a personal computer, they found that those who actually bought the product already had a personal computer, and were looking for a complement.  Thus was born synchronization and the keyboard-free format that dominated the PDA market for several years.  During this period, Palm’s sales grew from nothing in 1996 to over a billion dollars in 2000.

7 Steps for Better Breakthroughs

The following steps can help increase an organization’s capacity for developing successful breakthrough innovations.

Mindset Modifications:

1. Adjust expectations. This is perhaps the most difficult step, but it’s mandatory. If you expect to have a breakthrough product, you must expect that the process of getting there will be different than what you are used to. You are expecting big results. You must expect a departure from the norm.
   
   
2. Anticipate iterations. Be prepared for multiple iterations. Do not expect perfection and completion in the first round of development.  To demonstrate commitment to this idea, and set appropriate expectations, ask the project team to estimate the number of iterations the new product will require prior to success. 

3. Fail early. Structure the approach to product development in a way that allows the team to “fail fast” and prototype frequently.  Weed-out bad ideas early (when it costs less).

4. Be Patient. Don’t charter a team designed for full market execution until you’re confident that you have a clear target and the right product.

Tools to Implement

5. Minimize failures through modeling. The engineering world has long embraced a modeling technique called “Failure Modes and Effects Analysis” (FMEA), to predict and avoid potential product failures. While this technology has most often been used to understand failure modes of existing products, we have also used it to test all aspects of an innovation project, including the proposed product, team structure and operating environment. Understanding potential failure modes provides a clear set of tasks and activities for the team to focus on.

6. Double-team the project. Establish two independent teams to achieve the same goal.  With two teams working on the project you are more likely to fully explore the range of possible solutions, and you are guaranteed at least two approaches.  Also, the many undefined aspects of breakthrough innovations lend themselves to the generation of diverse options.
   
   
7. Get a fresh perspective. Supplement the project team with objective (even skeptical) perspectives. A dedicated project team is appropriately biased towards action and the positive.  To balance this bias, commission an outside board of advisers (the venture capital model), or develop a “black hat” perspective on the project (a “nay-sayer” position that is constantly looking for what could go wrong with the project and the product).

Conclusion

Breakthrough innovation implies a dramatic emotional shift away from traditional product development. It puts the team in a slightly more perilous position, but in doing so, introduces the potential for a stronger finish in the race: Arriving at the finish line with a better breakthrough product. Fast Failure liberates the product development process to set breakthrough ideas free.

# # #