“Innovation distinguishes a leader from a follower.” –Steve Jobs
And if anyone should know, it certainly was Steve Jobs. To help converters and their end-user customers get a better handle on reducing risk when introducing innovative products, Don McClure, president of Acuity Consulting & Training and a retired 3M Co. researcher, offered a look at the “Real-Win-Worth” process. His presentation at today’s AIMCAL Web Coating Conference in Reno, NV, outlined the tool’s 17 criteria for achieving success in this area.
When it comes to innovations, Real-Win-Worth tells companies to ask, “Is it real? Can we win? and Is it worth doing?” McClure said. Small innovations rarely produce large returns, while big innovations are risky but may secure significant growth. The more different and new the technology and market it will go to compared to what a company normally does, the higher the probability of failure. It’s easy to invent stuff that’s similar to what you’re already doing, McClure said.
So how do you reduce the risk? Ask these 17 questions:
Is it real?
Is the market real? 1) Is there a need or desire for the product? 2) Can the customer buy it? 3) Is the size of the potential market adequate? 4) Will the customer buy the product?
Is the product real? 5) Is there a clear concept? 6) Can the product be made? 7) Will the final product satisfy the market?
Can we win?
Can the product be competitive? 8. Does it have a competitive advantage? 9) Can the advantage be sustained? 10) How will competitors respond?
Can our company be competitive? 11) Do we have superior resources? 12) Do we have appropriate management? 13) Can we understand and respond to the market? 14) Does the company have a competitive advantage?
Is it worth doing?
Will the product be competitive at an acceptable risk? 15) Are the returns greater than the costs? 16) Are the risks acceptable?
Does launching the product make strategic sense? 17) Does the product fit your overall growth strategy?
You want to rate the answer to each question simply, like giving it a “red, yellow or green” light. Don’t get bogged down in a 1-10 rating scale. Be sure to get input from R&D, marketing, manufacturing and management. Next, ask if you really believe the ratings you gave it, McClure said. Then, invest in moving the red ratings to yellow and the yellows to green. Don’t bother investing to make the greens greener, and don’t wait until everything is green, or it will be too late.
Using the Real-Win-Worth tool only helps reduce the risk of introducing innovative products, McClure said. It won’t eliminate risk; it just tells you where the issues are.
Why be an innovative company? One incentive, for instance, is that innovative businesses typically enjoy higher valuations on the stock market. It’s called the “innovation premium.”