Developing market-driven ideas
Although there are no sure recipes for bringing your innovation to the market, following a few tried-and-true basics can greatly increase your chances of success. Whether you're launching a product or service or improving a process, the key steps in developing market-driven ideas are fundamentally the same.
Look at the added value
Most entrepreneurs will attest to the fact that the best business ideas solve a problem, answer a need or fill a gap in the market. However, your innovations could also improve a business process, reduce waste or enable employees to be more productive. To determine whether your idea is likely to be successful, ask yourself some questions such as:
- How different is it really from what's already being done?
- What is my distinguishing feature, and how will I stand out in the crowd?
- What value does it bring to my customer at the end of the line?
Get employee ideas and buy-in
Innovative ideas don't always emanate from the executive offices or management ranks. If you want your business to be creative and constantly focused on improvement, a good start is getting direct feedback and ideas from your employees. Encourage all employees to generate innovative ideas about products or services through brainstorming sessions or forums. Reward them for their innovative contributions to the company.
But be selective. Out of every 10 ideas, there may be only one where you will see a return on your investment of time and money. Once you've taken stock of your potential innovation projects, take the time to narrow them down and determine which ones are worthy of your company's resources. Keep in mind that the project has to have a payoff, such as improved customer service, increased revenues or long-term growth.
Your employees can also provide invaluable input, not just in the development but also the application of improved processes. After all, they're usually directly involved in making those processes work. Be sure that you communicate your innovation improvements systematically, and ensure your employees understand your ultimate objectives. For example, to implement an innovative manufacturing process, employees need to understand the bigger picture of how one process will have an impact on overall productivity.
Use customers to develop your innovations
Getting your customers involved in the design of your product and service is also a good strategy. As an alternative to formal market research, it is known as Customer Focused Innovation (CFI) and is a lower-cost and highly effective marketing technique. CFI better aligns client needs to your product or service and creates a two-way exchange of information.
The most common means of conducting CFI is the round-table discussion or focus group. In this approach, the business gathers a number of clients or potential clients in a room to discuss exactly what the product or service might be and the problems it could solve. Following this, you could do a follow-up discussion to prototype your product or service, confirm that you are on the right track or determine that there are still product changes to be made.
Get external help
You can also consider getting external help to assess the viability of your ideas. Be sure you understand your objectives. Assessing both the pros and cons will help you establish a clear strategy and objectives. Look at areas such as:
- Operational efficiency: Waste reduction and management, productivity improvement analysis, quality management
- Product research: New product modeling, competitive product studies, pricing strategy
- Business research: Short-/long-range forecasts, business trends, profit/value analysis
- Sales and market research: Market potential, market-share analysis, location studies, sales analysis, test markets, distribution channels, value vs. cost studies, sales incentive impact studies
- Advertising research: Local conditions, effectiveness studies, competitive advertising
Draw up a clear business plan
You'll need to convince investors or lenders to help you finance your venture. Your business plan should include your mission, objectives, strategies, sales forecasts and your Unique Selling Point or USP. Your USP determines why customers should buy from you instead of competitors. It could be that yours is the best product or service in the market, the lowest priced or highest quality, the most innovative, or that you provide the best after-sales service, or any other factor that influences customer buying behavior.
This also applies to improving your processes or areas such as operational efficiency. Be sure your business plan includes a clear map of how your company will operate in the future. Your lender has to have confidence that your innovation will lead to improved profits or productivity.
Be sure that you've clearly outlined how the initiative will be rolled out, with measurable targets and milestones. These are essential in the process so that employees and investors involved can see any progress along the way. Your innovation team leader can report how the project is evolving and convene any meetings necessary to adapt your plan.
It may take some time to see if your investment is paying off, but be sure you have a way to monitor project progress. If you're launching a new product or service, you may see a positive impact in your sales figures. An improvement in a production process might be measured by your production output or customer satisfaction. Remember that any innovation initiative should show measurable results, even if it's qualitative such as improved employee satisfaction. As a follow-up to your innovation project, you can conduct surveys or focus groups with all stakeholders involved.