Tuesday, May 10, 2011

The Fuzzy Front End of New Product Development

Thomas Edison said that genius is 1% inspiration and 99% perspiration. As one of the prolific inventors of all time, Edison undoubtedly knew what he was talking about. However, I don’t believe he ever indicated which comes first, the inspiration or the perspiration.

Generally it is assumed that inspiration precedes the sweaty work of invention. But recently my appreciation has grown for the perspiration that precedes inspiration, the labor that yields the powerful one-percent of which Edison spoke. The old adage “chance favors the prepared mind” speaks of the same truth.

Many companies are chronically dissatisfied with meager returns from their innovation efforts. This dissatisfaction may stem partly from an impatient and premature rush to generate new ideas. Managers with responsibility for new products or other innovation initiatives are under pressure to show progress for their efforts. In their rush to results, they can jump too quickly into the creative phase looking to the idea generation process as the way to get inspired. But without spending appropriate time and energy to discover, examine and understand the entrepreneurial opportunity, the corresponding innovation is undernourished.  And this malnutrition results in weak, uninspired ideas, not to mention a lot of sweat.

When the generation of ideas substitutes itself for the discovery and understanding of an entrepreneurial opportunity, then creativity is easily misdirected. Insight-less idea generation has left many innovation efforts stuffed with activity but starved for substance. What inspiration we can muster is focused on opportunities that are often too small or offer insufficient promise to compete for resources from corporate initiatives. 

Business planning and idea generation are absolutely necessary in new business, category or product development efforts. However, they often do not yield the kind of inspiration that direct observation and discovery can when done explicitly and purposefully. This discovery phase has been called “the fuzzy front end” of new product development.

A central task of the fuzzy front end is to get in front of the trends before everyone else; in other words, to discover underlying changes in behavior that reveal new trends before they are generally recognized.  Devoting appropriate time and attention to the fuzzy front end of innovation efforts before jumping into the planning and idea generation phases, can help managers make better decisions regarding which new opportunities to pursue.

The fuzzy front end—the perspiration that precedes the inspiration—is more about discovery than planning, more about observing changes in human behavior than analyzing market behavior, and more about creatively anticipating trends than analyzing existing trends, product categories or competitive behavior.

The fuzzy front end demands a willingness by managers to be lost for a while. The nature of the work in this phase is entrepreneurial and unfolding rather than managerial and administrative. Many managers spend insufficient time, patience and effort in the fuzzy front end of innovation.

Lack of attention to fuzzy front end is not surprising given the discomfort of uncertainty often felt during this phase. But doing the fuzzy front end of an innovation effort well and patiently can help address the chronic dissatisfaction companies have with the new product process.  In the end, an inspired, entrepreneurial observation may be even more valuable to a company than a creative idea.

For example, in the 1970s, research consultants were looking for new business opportunities for the Kimberly-Clark Corporation. In their search they uncovered two seemingly unrelated facts. Once had to do with the demographic trend heralding a burgeoning older population. The other fact came from the medical community—a significant percentage of people over the age of 65 years experience incontinence. These two facts were then related and coupled with a new non-woven technology called Coform, which was invented by a Kimberly-Clark engineer. This combination led not only to a new product, Dependsรค, but also gave birth to a new market, product category and a very successful new business.

A large part of the entrepreneurial challenge for established companies is to find an idea that is big enough to warrant the investment despite the risk and to divert resources from other priorities, yet related enough to corporate interests that it makes sense to pursue. It is not simply a question of fit. It is a question of fit and the size of the opportunity.

The dual challenge of the fuzzy front end is to both discover what is new and find the vocation of your organization.

Almost a decade ago, Peter Drucker made a similar point in his book Innovation and Entrepreneurship.  He said, “There is actually no empirical evidence at all for the belief that persistence pays off in pursuing the brilliant idea. Bright ideas are the riskiest and least successful source of innovative opportunities. The casualty rate is enormous. Most successful innovations are far more prosaic. They exploit change. And thus the discipline of innovation is a diagnostic discipline: a systematic examination of the areas of change that typically offers entrepreneurial opportunities. 

So where do you look for inspiration? The perspiration that precedes inspiration requires both an outward and inward search. Many have made the mistake of doing only one or the other, not both. The dual challenge of the fuzzy front end is to discover what is new and find the vocation for your organization.

The outward search can be as simple and mundane as simply getting out, wandering around and making observations, especially of people who are experimenting with new ways of living and working.  More formal activities can include various scanning activities, listening to customers in roundtables, “unfocused” focus groups, and structured or unstructured interviews, conducting expert panels with technologists and leading industry analysts. The goal is to identify the early indicators of significant change. A good way to do this is to make your own observations.

The inward search should be driven by an attempt to understand the underlying causes of expected events, results and discrepancies between what is and what ought to be in the context of the current business.  Surprise results, even when they are successes, should be closely watched. They may be the early warning signs of major change.

The fuzzy front end should be approached with a balance of curiosity, open-mindedness and humility.  And though it may not be very comfortable to put ourselves in the middle of ambiguity, it can bring us closer to an entrepreneurial opportunity your competition does not see. As the French writer and philosopher Voltaire noted, “Doubt may be an uncomfortable state, but certainly is a ridiculous one.” 




 

Potential Sources for Innovation


The following are symptoms of change worthy of our attention as they are likely to signal underlying opportunity for innovation. These sources are listed in descending order of predictability and reliability; yet those sources later in the list represent higher rewards for those who do succeed.

1.     Unexpected events and results.
2.     Incongruities
3.     Process needs
4.     Structural changes in industry or market
5.     Demographic changes
6.     Changes in values, attitudes and perceptions
7.     Arrival of new knowledge
 8.     The “bright” idea

  Sources from Innovation and Entrepreneurship: Practice and Principles by Peter F. Drucker
 

This article was originally published in Innovating Perspectives in October 1995. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270.

No comments:

Post a Comment