How Enterprises Course-Correct Dud Launches With Growth Innovation

When life gives you lemons, make lemonade. Eyerolling cliché aside, the sentiment slaps. Consider that every pro athlete studies game film to understand past failures and up their game. Performance reviews at work take into account the things that went wrong in order to create better outcomes for the coming year. The very crux of analysis is to study the past to understand what went wrong and improve the future. So yeah, poor us a tall glass of that mouth-puckering, eyelid fluttering, refreshing zesty squeeze. We are all for learning from past mistakes.

Case in point: you’ve launched a new product, but it’s not performing the way you’d hoped. Now what?

Sometimes you put in the months (or years) of R&D to create a new and exciting offering only to find that the market just isn’t as excited about it as you are. While a disappointing launch isn’t a good thing, it isn’t necessarily an indication that your new product is a failure, either.

In fact, we’ve seen some enterprises reliably rescue profits that would otherwise have fallen by the wayside. In a study we commissioned with Forrester Consulting, we explored how some of our most successful innovation management software clients approach innovation, and what others can learn from them. What we found is that the most successful enterprises take a novel approach to managing new product launches, and this approach yields some fascinating benefits:

• An average 1% increase in profit margins by finding ways to improve new products post-launch
• In one case, a 30% increase in revenue related to product improvements
• In another case, an additional $11 million USD in annual cost savings

These wins are the result of the enterprises in the study adopting growth innovation methodology: an innovation management philosophy that sets growth as the single most important innovation outcome and manages every step of the innovation process accordingly.

Growth innovation helps these enterprises improve underperforming products and rescue profits. It can help you do it too.

The Most Common Underlying Causes of Dud Launches

In order to understand how growth innovation methodology turns around underperforming product launches, first we need to review the root causes for these types of situations in the first place. Obviously, this isn’t an exhaustive list of factors that contribute to dud launches (that list would go on forever!); however, these are the most common reasons for launches going awry that we’ve observed.

1. Misinterpreting the Market’s Needs

When a brand new product launch underperforms, the immediate assumption is often correct: the product doesn’t fit the gap you were trying to fill in the market. This problem often arises in the early stages of innovation: at the points of strategy and ideation.

The company strategy may direct the enterprise in a direction that isn’t aligned with the market’s trajectory. Innovative business leaders attempt to “skate where the puck is going,” planning new product schedules so that they launch at a time when the market will best respond to them. But sometimes, the market doesn’t behave the way the strategy anticipates. And other times, innovation strategies over-index on current market hype, leaving the enterprise with a pipeline full of new products that are old news by the time they leave development.

The front end of innovation (FEI) can misinterpret the market’s needs, too. The process of building business cases for new ideas is far from immune to bias, which can lead to sampling errors, selective learning, and less-than-objective decisions when it comes to greenlighting projects for production.

2. Underinformed Expectations

The product isn’t always at fault for an underwhelming launch: sometimes the targets are the real problem. If a project’s expectations are out of proportion with actual market demand, then a project will look like it’s failing, even if it’s performing the very best that it can. Unrealistic expectations can be an outflow of the first cause we discussed (bias in strategy and/or FEI), but there are other ways that underinformed expectations arise.

A common cause of unrealistic expectations for many enterprises is a simple lack of access to historical data. When data on past projects’ performance isn’t readily accessible to the people making strategies or vetting potential new ideas, setting accurate targets becomes difficult.

Sometimes targets are set to fill gaps: the innovation portfolio needs to meet certain quotas, and the targets reflect the business needs more so than a realistic projection of a given project’s performance.

3. Overinvestment

A successful project contributes more than it takes. However, if an enterprise invests more resources than necessary into a project up front, the demand for returns likewise becomes unnecessarily high.

This can occur from simple overengineering. Sometimes too much time and resources go into making a project “perfect” before launch, whereas a project may have performed just fine with an earlier launch and later updates and iterations.

Overinvestment is also a common side effect of process inefficiencies within the innovation organization. Excessive deliberation, belabored processes, and human error can all bloat the enterprise’s investment in a given project, which unnecessarily raises the bar for the project’s performance.

How Growth Innovation Rescues Dud Launches

Enterprises that use growth innovation methodology successfully counter these causes of dud launches. They can swiftly identify when new products are underperforming against targets and assess whether problems are arising from misinterpretation the market needs, underinformed expectations, inefficiencies in investment, or any combination of the three.

This is because growth innovation enterprises commit their entire innovation organizations to three key principles, which we call the growth innovation trifecta:

• Growth: Articulating measurable targets in the innovation strategy and explicitly connecting every innovation activity to at least one of those targets
• Visibility: Centralizing all innovation management data in one place and giving every stakeholder access to the information they need
• Orchestration: Making every decision in the context of a portfolio-level growth strategy

There’s nothing novel about these principles in theory. Most innovation leaders agree that they are vital to running an effective innovation shop. But what separates growth innovation enterprises from the rest is their radical commitment to these principles in every area of the innovation organization. This thorough, top-to-bottom approach enables them to rescue profits from underperforming launches.

1. Setting Targets Based on Historical Performance

Growth innovation enterprises aggregate all their innovation data into one system, giving them the ability to see how past innovation projects have progressed and performed. This data is visible to any stakeholder who needs it, which means:

• Executives set the innovation strategy in the context of past performance. They assess the relationship between innovation inputs and outputs, and set expectations for the innovation portfolio accordingly.
• FEI managers build business cases for new ideas based on how similar projects have performed in the past. This allows them to make more informed ROI estimates, because they have the actual numbers regarding the true costs of production and marketing that have gone into similar projects.
• Production managers can give accurate cost and timeline estimates for new projects based on how similar projects have progressed through the pipeline.
• Line-of-business managers can make more informed sales and marketing projections for new product launches, because they can readily access the quantitative performance of similar launches.

This level of visibility allows growth innovation enterprises to quickly identify discrepancies between their initial targets and actual launch performance. Or as one interviewee in the Forrester study put it:

“We bring all of our actual data into Accolade [Wellspring’s innovation management software]. Then you can do the root cause analysis to go back to what were your initial assumptions and actually see where, for example, you were misguided. That allows you to take that learning now and actually course-correct. You can refine it if it’s not fully addressing a particular consumer need or consumer problem.”

2. Evaluating Projects Against Those Targets in Real Time

Because growth innovation enterprises integrate all their systems with their innovation management system, they can monitor every launch’s performance in real time. This makes it possible for line-of-business leaders to spot underperforming projects and explore course-correction options right away, rather than evaluating performance at the end of the launch period.

This as-it-happens performance monitoring keeps business leaders at the front of every launch to make adjustments as they’re needed. One interviewee in the Forrester study explained the power of data visibility:

“Accolade helps us with market performance evaluation. We’ve automatically started to track performance versus the original targets. That allows you to start to identify where you’ve got underperforming products versus what you planned.”

3. Identifying Ways to Improve Efficiencies

Growth innovation enterprises regularly review and recalibrate activities, constantly finding ways to optimize innovation processes. Because these reviews involve leaders from various innovation teams, it’s easy for effective new tactics to transfer between teams and projects. This knowledge sharing, combined with the heightened visibility to project performance, enables the enterprise to trim inefficiencies and strategically reinvest labor, leading to an average 10% reduction in project management costs.

Start Rescuing Dud Launches With Accolade

In order to course-correct an underperforming launch, you need a tool that enables you to see real-time project performance, review historical project data, and identify ways to put a project back on track. The enterprises we studied use Accolade to do this.

Accolade integrates with your other innovation systems, centralizing all your innovation data in one tool for stakeholders to view and analyze. When Forrester assessed the effects of Accolade on these businesses, they found an average five-year ROI of 321%.

If you’d like to see how Accolade can help your organization course-correct product launches, we’d love to show you. Schedule an Accolade demo today.