9 out of 10 People Can’t Spell Innovation – aka, What is Innovation?
Lesson #2 of Turning Ideas into Market-Winning Products.
OK, that is a bit of an exaggeration, but spelling aside, many people do not understand what innovation is let alone what it involves. Even people who have been in product development and management roles for several years are frequently unfamiliar with the practices and processes successful product innovators use.
Why This Lesson is Important and What You Will Learn
After reading this lesson you will know the similarities and differences between products, product development, product management, and product innovation. Getting these terms and concepts clear in your mind will create an important foundation that later lessons build upon. Even if you are well-versed in these terms, keep reading to see how your definitions compare with those below.
What, There Are Only Two Kinds of Products?
“Well, who doesn’t know what a product is?” you may be thinking. Most people use hundreds of products daily! But did you ever stop to think about what they really are, what they “do,” or how they come about?
Starting at the beginning, products are either tangible physical goods, intangible services, or a combination of both. If you can touch it, the product is tangible. Intangible products generally involve customer participation in some important way – something performed by people for people. Some examples…
Tangible (goods): toothpaste, laptop, music player, app, automobile
Intangible (services): insurance policy, retirement planning, ride-sharing, airline flights, banking
Product designers often think in terms of product features and the benefits they create. Beyond this, value is the key… and it is as real as the customer’s perception of it.
You know the expression, “Beauty is in the eye of the beholder.” Well, the same goes for value. The customer is the judge and jury of product value. In order for your products to be competitive in the market, they must deliver value.
So, how do you create a product customers value? Know your customers! Techniques for accomplishing this will be shared in a future lesson. First, let’s understand the nature of product development, management, and innovation.
What is Product Development?
Every product begins as an idea or concept first that is analyzed, developed, and validated to become a product. Typically thought of as a set of processes that transforms a concept into a product, product development launches the finished result of an idea to a market. A clear set of processes equips you to repeat and improve on your product development success. The ProdBOK (The Guide to the Product Management and Marketing Body of Knowledge) organizes product development processes into four phases: Conceive, Plan, Develop, and Qualify. Product development is the process of evolving concepts into a tangible (physical goods) or intangible (services) product through these four phases.
What is Product Management?
Think of Product Management as the set of activities responsible for the success of a product in a market. This duration in the marketplace is called the product lifecycle, which is how product sales vary over time, moving through predictable stages for a successful product.
Product Development or Product Management?
A note on terminology regarding management and development: They’re not set in stone. Product Management can have different definitions in various organizations. For example, Product Management may include all of the responsibilities of Product Development or it may only focus on managing products after they have been introduced to customers – managing the product lifecycle.
What is Innovation?
“Innovation” is one of those terribly important, but overused words. Too often the word takes on numerous meanings.
In Product Development, “innovation” is not some pie-in-the-sky, motivational word. The phrase “product innovation” refers to an intensely studied field of knowledge. Certain rules regarding innovation clearly govern your success in the creation of market-winning products.
Product innovation involves all activities that result in creating a new product. But innovation for its own sake is meaningless – even detrimental – to a product’s success in the market. The best innovators strive to add value. (There’s that word again!)
Product innovation transforms ideas into products that provide value to customers.
Have you ever heard a leader of an organization, maybe in your organization, say something like “We need more innovation around here,” and then nothing really changes? Things don’t change because employees don’t fundamentally understand what innovation is, let alone what it means to be more innovative. With the foundation you just created, you can help others understand how innovation is related to product development and product management.
The next lesson will share the secret of innovation – a 3-part model.
Chad McAllister, PhD
Chief Product Master at Product Mastery Now
P.S. Every week I help to better equip and inspire product managers, leaders, and innovators using my podcast, The Everyday Innovator™. See the latest episodes.