You could present 50 great ideas to your CFO and he wouldn’t invest in any of them. And if he did how would you know your customer would buy them? Product innovation at its most basic is all about developing ideas into future revenues, but you cannot afford to take a risk on every idea that comes through the door. What you need to do is find the right ideas. But how do you identify the right ideas to invest in for your business? Go for home grown ideasStart with your people, as they are your biggest assets. The people in your organisation are the in-house experts who act as the eyes and ears of your business. Engage with those who regularly talk to customers, have a pulse on market trends, and those who foster innovation.Consider your business a natural hot house where home grown ideas can be planted and nurtured into future revenue streams. All you need is guidance and a logical methodology to understand if the idea meets a customer need, will be profitable, and if the company has the necessary resource, skills or partnership to sell and deliver it.Use the voice of your customers to guide youWhen assessing ideas the voice of your customer is invaluable. Home grown ideas still need to be aligned to meet the needs and address the problems of your customers. Just because your in-house experts think that an idea is great doesn’t mean it will resolve the real burning issues of a customer’s business. Customer insight will not only give you the answer to the basic questions of: do they need it, do they like it, does it solve a real business problem and would they buy it. It will give you greater insight into their real pain points and the needs of their business, improving customer intimacy, while helping to create your future services roadmap and pipeline. If ideas are going to fail, fail fast and fail cheaplyHow do you address the risk of new product or service development? According to the inventor of the “stage-gate”, Robert Cooper, of every 7 new ideas for product/services approximately 4 enter into development, only 1.5 are launched to market and out of that only 1 succeeds. That’s a tough scoreboard. So how do you hedge your bets? A lot of companies try to get an idea 95% right internally before taking it to market. Why doesn’t this approach generally work? Because you only see the failings after it’s been launched and by then it’s too late to make changes as it’s already in the market. An alternative approach is to get your idea direction about 40-50% right in a prototype and then show it to your customers or adopt a start-up LEAN approach and create a minimum viable product and beta test it with your customers, changing and improving it in iterations. This lets your customers tell you the idea flaws, improvements or kill ideas before you have invested in costly full blown development and go to market.How do you do it?You need to use a logical innovation method to wade through hundreds of ideas and get down to the ones that will really work for your customers and your business. At Colt we facilitate innovation through a combination of tools to drive a systematic approach to creative idea generation and new concept development. For example, the Colt innovation toolbox and the Forth innovation facilitation methodology (more reading on the method from Science for Society “How to reduce the failure rate of innovation”). Key to this is testing new product and service ideas with your customers throughout the process (including idea generation, prototype, user experience and commercials). With this approach, concepts have strong internal support because they are most often home grown by your in-house experts and have good external support because they reflect the voice of your customers. This means you can approach your CFO with a few well supported, thought through and tested concepts which will give you a strong business case to discuss investment opportunities, drive innovation and potentially create a new revenue stream for your business.For more information please visit the Colt Innovation Hub.
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