Here are a few insights that might change your innovation mindset, from fear and prudence to confidence and action.
1. The flagship business case
When planning the innovation budget for your next generation flagship, you need to consider the business case of your flagship product. You need to look at the bigger picture. The value of the flagship product often reaches far beyond the sales of the product itself. It creates the platform for all kinds of other businesses. Service contracts, spare parts (automotive industry), accessories, online services (like iTunes for the iPod) and consumables (like single serve coffee cups). On top of that, consider the influence of the flagship product on your brand value, resulting in higher sales for other products under your brand.
"Consider all revenues together and you see the importance of a great flagship design."
The investment needed to develop the next generation flagship might feel uncomfortably large. You might not have the cash. But, in many cases there venue, direct and indirect, easily adds up to ten times the investment. But for some it can also be well over a hundred (!) times. When you are pushing to cut R&D cost, you might be acting pennywise. Every extra euro spent on flagship R&D, will likely pay back manifold.
2. Development speed
Apart from ‘budget versus business case’, there is ‘spending rate versus time-to-market’. It might be tempting to limit burn rate and keep the development team on a tight leash as a way to control the cost of development. It is understandable: you want to make sure every penny is spent well. If that is your strategy, consider these four effects:
The longer the development takes...
... the more meetings you will have, the more reports will be made showing less progress,
... the more the project scope changes along the way, simply because of the time passing.
... the more people will start losing focus and start doing other things on the side, and
... the longer it takes to hit the market and the higher the risk for the competition to be first with that new killer feature.
So, not only are you better off investing generously in the new flagship development, you better also do it at a much higher burn rate than a cautious mind might tell you.
3. Scope – Doing the right thing
Next to development budget and pace, I would like to mention project scope. Do you have to make giant technological leaps? Will you stuff it with new features?
"Development is like eating steak: bite off a too large chunk and you will keep chewing and never swallow."
You probably have years of dealer feedback and customer reviews available. As well as a complete overview of the competition, updated annually. Next to that, you have identified emerging technologies to implement. And probably you demand better margins, lower production cost, more features, and all completely modular and customizable.
This is where I believe some restraint is vital. The next generation flagship should not be the summary of all your ambitions. This is the moment to choose your product features wisely and train yourself to say “no!” to the rest. Development is like eating steak: bite off a too large chunk and you will keep chewing and never swallow. Instead, draw a product roadmap to select the highest valued features for your MVP and plan the rest for future releases.
4. Team leadership
Once you are in the mindset of investing intensely and with a razor-sharp project scope, things can still go terribly wrong. Product development is a very tough and complex process. Every aspect must be done the right way. Translating tomorrow’s market needs, agile but structured project management, creative design, intensive engineering. You will need funding, skill, focus, stamina, and a positive team spirit. There is so much at stake. Things will get tense when targets are not met. But you have to stay cool.
"There is so much at stake. Things will get tense when targets are not met."
Make sure you select a team with the proven track record and assess them thoroughly. And all the time running the project, keep the project dynamics healthy. The members in your team are human. Keeping them in an Olympic mindset is paramount to a successful development. Just like an athlete it starts with motivation for a common goal. And then, trust them with what they are doing and allow mistakes to give the team the confidence to perform. Stand next to them and cheer them. But keep challenging them and pushing them to excel together, like a true coach.
Scratching the surface
Working at a design and innovation firm for 18 years, I have been involved in many clients’ next generation flagship projects. The insights are based on these experiences.
The four topics: business case, development pace, project scope and team leadership are topics with many more aspects influencing your development success. And a vast amount of other topics are equally important as well.
Although I know these tips are not even scratching the surface, I hope some of my experience helps you to reframe your product development mindset.