In the realm of innovation management, achieving success entails a delicate equilibrium between harnessing cutting-edge technologies and addressing direct customer needs. This 10-point guide shares a comprehensive strategy for de-risking innovation, considering both technological advancement and customer desires.  By following these steps, you'll achieve a meticulously crafted pathway to innovation success.

Follow These Ten Steps to De-risk Innovation

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1. Clarifying purpose and boundaries

This pivotal phase we ask fundamental questions that seek to delineate the project's boundaries, its underlying raison d'être, where to innovate, and the individuals responsible for its leadership. These seemingly straightforward questions frame the scope of the innovation project, its defined parameters, the core intent driving its execution, and the pivotal figure at the helm of the project. Defining clear innovation objectives and establishing measurable metrics to track progress helps ensure alignment with overall business goals and provides a basis for assessing the success of your innovation efforts.

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2. Unpacking the Value Chain and Identifying Key Customers

Navigating the intricate landscape of business-to-business (B2B) dynamics involves a comprehensive grasp of the value chain and the most pivotal customer. Conventional wisdom often pegs the most important customers (MIC) as those directly purchasing the product – the immediate buyers. A value chain breaks down all the transactions between you and the ultimate end user of your product. By asking the three simple questions the true MIC can be identified. Who shoulders the responsibility of rectifying issues? Whose financial stakes are highest in the event of a complication? Who perceives the intrinsic value in your offering?

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3. Crafting "Current State" and "Optimal Benchmark" Value Curves

Essentially, a value curve dissects a product or service into discrete facets of performance, each intricately tied to attributes like user-friendliness, technology and functionality. These individual facets are then further deconstructed, revealing their nuanced components. The value curve performs a dual role: it not only dissects the product/service, but also aids in the strategic prioritisation of elements, based on their significance to the MIC. This activity requires stepping into the shoes of the MIC, allowing you to tailor the curve to their perspective. Subsequently, during the ensuing interview phase, the value curve attributes serve as a scaffold, enabling interviewers to join insights with the attributes contained within the value curve.

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4. Contextual Interviews: Revealing Unmet Needs of the Key Customers

Contextual interviews serve as a qualitative research technique to unveil the unarticulated needs of your MICs. Inaugurating this process is the pivotal question: "What issues keep you awake at night?" This approach exclusively hinges on open-ended queries, deliberately setting aside any preconceived notions of the conversation's trajectory. For instance, "What do you anticipate being the most formidable challenges within your industry over the next five years?" The efficacy of these interactions hinges greatly on the interviewer's proficiency in extracting insights and steering respondents toward expansive reflections. The conversation's power lies in the interviewer's adeptness at fostering open-ended contemplation, a skill indispensable for this undertaking.

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5. Forging the "Optimal Benchmark" Value Curve

The insights harvested from the fourth phase play a pivotal role in shaping the blueprint for delivering value to the Key Customer. This pivotal juncture involves the construction of the "Optimal Benchmark" value curve, an endeavour that hinges on the deliberation of which facets of performance are new, and which require modification or elimination. However, it's essential to clarify that, at this stage, the focus is exclusively on delineating the "what" – the necessary actions – and not yet delving into the intricacies of the "how."

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6. Review the “Optimal Benchmark” value curve with the MIC

Refining the "Optimal Benchmark" value curves involves a review with the MICs to ensure agreement on each curve element and its priority. Discrepancies prompt discussions about potential adjustments and this introspection prompts the MIC to pragmatically consider areas of feasible value enhancement, acknowledging the constraints of addressing all aspects concurrently.

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7. Dynamic Customisation

Modifying the "Optimal Benchmark" value curve is a dynamic process, shaped by insights gleaned from the contextual interviews executed during the preceding step. At this point you should possess a precise roadmap for achieving the delivery of extraordinary value to the customers who are significant to your success.

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8. Define your value proposition

This is the combination of the “Current State” and “Optimal Benchmark” value curves, taking into account priorities and constraints on time and budget. The result will be a solution that delivers value that the MICs want to see and will make a difference to them and the entire value chain.

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9. Designing and Implementing the Innovative Step

This marks the commencement of the design phase, where the blueprint for the innovative leap takes shape. Up until this stage, engineering design has remained uninvolved. The progression through steps 1 to 8 furnishes them with a lucid framework for transforming the MICs' concepts into tangible products and innovative solutions. Traditionally, this phase thrives on mechanisms like brainstorming, creative sessions, focus groups, and the application of Six Thinking Hats, Provocation Operation, Kanban, Agile Innovation and other such methodologies.

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10. Market Validation

Validate the Compelling Nature of the output from Step 9 with the MIC ensuring its persuasiveness and alignment with their expectations.
Finding the balance between pushing technological boundaries and crafting solutions that cater to the desires of your most critical customers is key to mastering the art of innovation. By harmonising these forces, your innovation endeavours can confidently steer towards success.

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To Conclude

It can be challenging to balance the adoption of innovative technologies with ensuring that you are meeting organisational and customer needs. If you are feeling hesitant towards innovation, make sure to do as much research as possible and take small steps to begin with. If you would like some more advice or want to discuss de-risking innovation, get in touch with our Innovation Team: info@sunderlandsoftwarecity.com

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