June 2013 | Nano Tools | Innovation
Nano Tools for Leaders® are fast, effective leadership tools that you can learn and start using in less than 15 minutes — with the potential to significantly impact your success as a leader and the engagement and productivity of the people you lead.
Contributor: George Day, PhD, The Geoffrey T. Boisi Professor, Professor of Marketing, The Wharton School, University of Pennsylvania; and author of the new book Innovation Prowess: Leadership Strategies for Accelerating Growth.
Effectively screen new products and services to decide which potential innovations are worth funding.
When it comes to innovation, many companies have it backwards. They start with the product or service instead of the market. Research shows that the vast majority of innovations fail because companies don’t ask questions in three key categories: Is there a real market for this? Can we gain and maintain a competitive edge? And will the expected payoff be worth the risks involved?
Looking at the market first makes sense for two reasons: First, the robustness of a market is almost always less certain than the technological ability to make a product or design a service. Second, if you discover that the market isn’t strong enough, you can head off a costly “technology push.” This syndrome often afflicts companies that emphasize how to solve a problem rather than what problem should be solved or what customer desires need to be satisfied.
The Real-Win-Worth It (R-W-W) screen is a simple but powerful tool to use in the early stages of the innovation process to test the viability of ideas for new products or services. It’s also useful at stage gates throughout the development process to confirm the value of the innovation project or to support its termination. At its highest level, the R-W-W screen consists of six fundamental questions: Is the market real? Is the product real? Can the product be competitive? Can our company be competitive? Will the product be profitable at an acceptable risk level? Does launching the product make strategic sense?
Although project screening teams vary by company, type of initiative, and stage of development, effective teams typically involve members from across functions, including R&D, marketing, and manufacturing. Service business teams would also include members from systems and IT. They should work with senior managers who are familiar with the screen and who can dispassionately push for accurate answers. The development team then answers the six fundamental questions by exploring an even deeper set of supporting questions. The team determines where the answer to each question falls on a continuum ranging from definitely yes to definitely no. A definite no to any of the fundamental questions typically leads to termination of the project, for obvious reasons.
All innovation involves risk, but by answering all the relevant questions in the R-W-W Screen you will have completed an effective due diligence analysis. You can be more confident in your recommendations, more influential with key stakeholders, and more likely to focus your innovation resources on projects that are well worth the costs.
Nano Tools for Leaders® was conceived and developed by Deb Giffen, MCC, Director of Innovative Learning Solutions at Wharton Executive Education. It is jointly sponsored by Wharton Executive Education and Wharton’s Center for Leadership and Change Management, Wharton Professor of Management Michael Useem, Director. Nano Tools Academic Director, Professor Adam Grant.
This Nano Tool previously appeared in the July 2011 issue of Wharton@Work
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