All companies need to watch their marketplace if they are going to sustain for the long term. Never has this been as true as now when advances in technology can radically change a marketplace in a very short period of time. It took nearly 30 years for the horse and buggy industry to be made redundant to the advances of the automobile. Nowadays, the business cycles of some industries can be less than a decade (remember the Palm Pilot, anyone?).
Often, R&D is often a department that is closely aligned to the wishes of the executive staff. Often expensive, unreliable and potentially disastrous, creating new products and services isn’t for the faint of heart, and the inclusion of the heads of a company to provide direction is prudent. However, executives often make fatal mistakes when working in bring new products to their customers:
1. Listen to your customers.
Your existing clients are the ones that are most inclined to buy products from you. They will often provide commentary (and often plenty of it) on what they would like to see in your products for free. This is not to say that you should actually do what your customers suggest. Rather, you should use that in context of what you are trying to accomplish and see if there are ideas you haven’t considered.
2. Listen to the larger marketplace.
Stay current on what the larger industry is watching and focusing. Though changes in the marketplace come faster than ever, they are not instantaneous and can be anticipated to a certain degree.
3. More features is not always better
A common feature that many software-driven products often get wrong is that additional software features can muddle an otherwise good product. A few years ago, nearly every smart device had an mp3 player attachment, though often is was a poorly designed and not central what the devise did. A few years before that, nearly every word processing program suddenly could draft HTML, even though it did it poorly and was even more complicated than their existing HTML program, FrontPage (since discontinued). Let your product focus on what it does better than anyone else and run with it.
4. Only spend as much money innovating as you can realistically get back within the first two years of a product on the marketplace.
I realize that this statement might be somewhat controversial. Determining ROI of a particular product falls victim to the same problem from which all revenue projections suffer: A “potential market” for a product is not always a ”realistic market” for a product. Unless you have an amazing distribution or sales network, even the best products take time to develop recognition within a market. Make sure that the market you are considering can return the value you need in a realistic period.
5. Bring Things to Market Often and Make Updates Frequently
There is a certain core competency that every new product needs to have to worthwhile to anyone. However, long gestation periods for new products can be counter-productive, especially as they can often lead to an inadvertent perfectionism, fiddling and shifts in focus as the target market moves to those whose products are have made it to market faster. Once there, keep developing and building your market as you perfect your gem.
6. Know when you should pull the plug.
This is another controversial statement. Sometimes you can’t predict when things will go wrong, when the costs will prove too high, or when the market has moved beyond the innovation you wanted to bring to it. Often a project can run out of control in time or money and become irrelevant no matter what you do. Don’t waste money on projects that are stuck or have become yesterday’s idea. You need to know when to drop the project and move to the next innovation. There is always another opportunity, and if your lucky, the work that you did before can be applied to the new one.
