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The Trouble with Fact-based Innovation

Here’s a fact for you: my most successful new product, out of well over a hundred that I’ve launched, had the worst qualitative and quantitative test results of anything I ever encountered. People hated it. Then it sold a quarter of a billion dollars in its first year. My second most successful new product, which won awards on three continents and became a 70-year-old company’s biggest new product ever, was similarly panned in early testing. Is there a pattern here?

The trouble with most innovation methodologies and processes is that they look for “facts” to guide decisions. There’s a reason for that. Facts are useful for driving alignment among groups of people with different interests, and alignment is essential for success in complex organizations.

So what’s wrong with fact-based innovation? Basically, it’s that not all “facts” are facts. They may derive from scientific-looking processes. They may look like facts. They may sound like facts. But they are fictions because they ask people to quantify their future decisions based on their current experience.

Such “facts” lead to bad decisions. That’s why, as Peter Murane points out, 70%- 90% of new products (depending on the category) fail within the first twelve months, and the ones that survive tend to have disappointingly small sales.

By fact-based innovation, I’m talking processes that put concept tests in the driver’s seat. You know, “On a scale of 1 to 7, how likely are you to buy Product X?” As if consumers could imagine a world in which Product X was part of their environment, speaking to them at the shelf and through various media, a world where early adopters influence our decisions.

Murane points out that concept tests are useful for weeding out the bad ideas. But even this overstates their usefulness, because they also generate false negatives. As was the case with both of my biggest successes.

Both of those products only became reality because of gut instinct and perseverance and a willingness to say, “Damn the facts! People don’t know what they’ll want in the future!” And some awfully patient senior managers.

Please don’t get me wrong. I love developing and testing concepts. But skilled innovators listen between the lines. They don’t care if people hate their idea, but instead seek insights about why people hate it. The trick is to get to the real world quickly and observe consumers using prototypes – not to believe what they say, but rather to trust what they do. Of course, as launch gets closer and serious spending ramps up, you better have some pretty hard rationale for why this innovation will succeed. Blind faith is as bad as false facts. Consistent innovation success requires juggling instincts, insight, options, and risk management.

I don’t have answers here, and that’s my point. All methodologies have flaws and vulnerabilities. Strong leaders know when to trust them and when to ignore them. In this, as in all things related to leadership, it’s a question of balance.

But one suggestion: get out of the lab and away from concepts as soon as possible. Risk failure. Put prototypes into people’s hands and let them use them where they live.

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2 Responses to “The Trouble with Fact-based Innovation”

  1. Bing Chou says:

    Mark – this sounds a bit like the Lean Startup methodology, which for the most part is only applicable to web startups.

    The idea is to get past the theoretical as quickly as possible, and to have users interact with a product “in the wild” instead of in a focus group. Web companies have the distinct advantage that they can integrate user feedback much more quickly into a web application than another company would a consumer product (sometimes with the user sitting by their side).

    If you’re interested in learning more, the blog to check out is http://www.startuplessonslearned.com/

    • mpfriedman says:

      Hi Bing – you’re right, web products and software have certain flexibility advantages. But rapid prototypes, real time customer/consumer feedback, and not discounting the role of intuition are equally valid for traditional products.

      Thanks for the link!

      m

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