Managing Innovation: Knowing When to Let Go

Posted by Patti Mikula on May 5, 2021

As Kenny Rogers said, “You’ve got to know when to hold ‘em, Know when to fold ‘em...” When it comes to innovation, that should be the mantra. But how do you know if an innovation is worth pursuing? Is it time to double down on investment or cut your losses? 

You need to prototype and user test each innovation as fast as you can. And, you have to have a culture that embraces failure. 

Prototyping is far less common than it should be. I don’t understand why any innovation investment isn’t preceded by some type of prototype and user testing. Whether you use rapid prototyping, designing clickable mock-ups, making paper prototypes, or role playing new service design, there are fast and easy ways to get a testable prototype into the hands of potential users. Maybe even multiple prototypes to bake ideas off of each other.

Generally there are two reasons I hear for skipping the prototyping phase and jumping right into development. One is (over) confidence and the second is secrecy. 

Sometimes companies are so confident they are right about the market needs that they don’t want to waste the time and money on gathering data they KNOW already. Which is fine if you are making incremental change and it is something that your users have been screaming for -- an edit button in Twitter for example. But even then, what if users think that’s what they want, but then they find out that they expressed their undying love for a photo of the Boston Red Sox only to have the original tweet changed to a photo of the New York Yankees. Maybe an edit function isn’t so innocuous anymore. Sometimes what the users say they want isn’t what they actually need. 

The second most common reason I hear for not wanting to prototype and user test is they don’t want to give away their great ideas. There are safe and secure ways of conducting user research. Consumer Advisory Panels can be formed, bound by NDAs, and duly compensated for their time, to ensure greater security. If the innovation is so super secret that you truly can’t conduct outside research, prototyping will at least allow you to test within the organization. Grab people from different teams, different divisions, anyone who can have a somewhat objective view of the product or service. It’s important to have someone without skin in the game confirm if you’re on the right track or not. 

Beyond prototyping and testing, the only way to be sure that you’re not throwing good money after bad is to ensure you have a culture that embraces failure. X, the “Other Bets” division of Google’s parent company Alphabet, publicly shut down two big experimental plays in the past year: Loon, maker of giant balloons designed to beam internet to rural areas, and Makani, which was hoping to make wind power from giant kites. Alphabet isn’t shying away from its big innovation bets though, in its third-quarter last year it invested over $1 billion in the X division. In his announcement that Loon was shutting down, X CEO Astro Teller praised the team and focused on the ways they would leverage their key learnings from Loon in future opportunities. 

You don’t have to make a big public show about the innovation ideas you kill though. There are ways to do so internally that will get the message across. Simply expressing gratitude to teams that have failed gloriously in pursuit of a BHAG. If news of failure is received with grace, and perceived as growth, teams won’t be tempted to ignore all the signs that point to why an innovation should be killed. And they won’t turn a blind eye to the data that says maybe their thesis was wrong.

Many companies have spent the past year exclusively focused on survival and Horizon 1 initiatives. They’ve had to redeploy Horizon 2 and 3 resources to near-term needs. As they return to business as usual, and look to the future, they may realize that what was once their Horizon 2 and 3 innovations no longer make sense. Or, that what was once a Horizon 3 opportunity is now Horizon 1. Consumer behaviours, social practices and risk tolerances have all dramatically changed over the past year, so too must a company’s strategic innovation focus.

If you are interested in learning more about how we help out clients ideate and prototype, I’m always happy to share our best practices. Reach out to me at patti@hackworks.com

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