Business Innovation: Iterative Approach
Glaze recommends refining initial business assumptions and subsequent data retrieved to verify the hypothesis. Further we recommend forming a strong framework for concluding whether the project should be continued or stopped. Keep the investment low during initial experimentation phases and once evidence of a valuable proposition is proven, refine the first fickle mock-ups for future applicability. Most importantly is to learn and fail fast.
An innovative business development team will quickly produce ideas from instincts and insights to where digital knowledge can enable new products and services. Alternatively, existing warehoused data can be scrutinised with the aid of skilled data scientists to spot missed opportunities already in-house. Any idea worth testing should then be dismissed fast if not sustainable; hence the recommendation to fail fast throughout the initial trials to keep up with the threat from other competitors exploiting similar ventures in the exponential race to win.
In other words: do not allow R&D to spend months developing a dedicated and novel solution; instead find inspiration from best practices already around and demand patching together generic building blocks. Test functional requirements quickly by Of-The-Shelf hardware modules using standard interfaces and connectivity supported by software tools. Modularity enables replacement of any component creating bottlenecks for the desired business experimentation.
A crude presentation of the initial experiments will indicate the potential value for customers. Data gathered during experimentation is analysed for a validation of the anticipated business value – and may even lead to unprecedented ideation.
Glaze recommends a fast initial experimental model like in the above figure – with off-the-shelf components and duct tape where needed – to test the basic idea. Iterative validation of a product concept can be viewed as firstly a “Works-like model”, based on evaluation circuit boards and standard building blocks. If trials indicate there is traction for elaboration, a “Looks-like model” where physical dimensions are in place can be tested. Finally, a “Feels-like model” with all nice-to-have functions and pleasant user experience is implemented.
A part of the maturing of the product offer is to optimize for manufacturability and ensure compliance to platform requirements to standardise elements across the company’s product portfolio. Interfacing between different components and layers are not only required for managing the R&D’s internal dependencies. An important decision is to be made on exploitation or secrecy of API’s (Application Programming Interface) to allow for sharing with external business ecosystems and enabling synergies: will the running shoe communicate only to own developed smartphone applications, will it conform to other 3rd party gear attached to e.g. Garmin, or will it send data directly to Endomondo or other social media. Which business model will bring most profits from collaboration or licensing with business partners?
Hesitating – while others make the initial mistakes
Do not expect a “wait and see – attitude” will pay off. Once it becomes visible which direction the competition starts pointing at it may be too late. Since year 2000 business empires have crumbled faster than ever due to hesitation and lack of confidence in setting a bearing. As long as new products are made in a traditional manufacturing plant according to the “Industry 3.0” paradigm, any major competitor can rapidly increase the pace of production and catch up eventually crushing the new market entrant. While successful companies on Forbes 500 lasted an average of 67 years in the 1920s, they typically stay on the list for only 15 years today.
The ultimate implication for a company hesitant to react when new trends emerge is to render obsolete to the market. An alternative fate is becoming sub-supplier of mechanical goods where others reap the majority of the value from the entire business system.
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