One of the biggest challenges in product management is to deliver products that meet the customers expectations and solve their problems. According to a survey by 280 Group, 1 out of 5 products fails to meet customer expectations, which can result in wasted resources, lost opportunities, and a damaged reputation.
Why do so many products fail? One of the possible reasons is that product managers and their teams do not have a clear and accurate understanding of their current state: the market, the customer, the competition, and their own capabilities and limitations. Without this understanding, they cannot design and execute a successful change management strategy to guide them from their current state to their desired future state.
How can product managers and their teams better understand their current state? One of the tools that can help them is the Innovation Value Pyramid, a framework developed by Innovolo that helps organizations assess and improve their innovation performance. The Innovation Value Pyramid consists of four levels:
- Level 1: Owner-driven. This is the lowest level of innovation maturity, where businesses are highly dependent on the owner, and scalability is nearly impossible. The owner makes all the decisions, often based on intuition and personal preferences, without involving or empowering others. The innovation process is chaotic and inconsistent, with no clear vision or strategy for the future.
- Level 2: People-driven. This is the second level of innovation maturity, where businesses take on key people who fill major roles, and scalability increases as the business becomes less reliant on the owner. The key people bring their expertise, experience, and networks to the table, and they have more autonomy and influence over the innovation process. However, there is still a lack of formal processes, systems, and metrics to ensure quality and efficiency, and there is a risk of losing knowledge and capabilities if key people leave.
- Level 3: Systems-driven. This is the third level of innovation maturity, where policies, procedures, and metrics provide a framework to ensure core operations remain consistent. Scalability significantly enhances because the negative impacts of growth are now effectively managed. The innovation process is more structured and standardized, with clear roles, responsibilities, stage-gate reviews, and performance indicators. However, there is still a lack of creativity and differentiation, as the focus is on incremental improvements rather than radical breakthroughs.
- Level 4: Culture-driven. This is the highest level of innovation maturity, where ultimate scalability is achieved when a business has a strong team dedicated to continuous improvement. The innovation process is embedded in the organisation’s culture and values, and everyone is encouraged and enabled to contribute ideas and feedback. The innovation process is flexible and adaptive, allowing for experimentation and learning from failures. The focus is on creating value for customers and stakeholders, rather than following rules or procedures.
|Level 1: Owner-driven||Highly dependent on the owner, chaotic and inconsistent innovation process, no clear vision or strategy for the future||The owner makes all decisions based on intuition and personal preferences, with low scalability.||Lack of formal processes, systems, and metrics, high risk of failure|
|Level 2: People-driven||Key people fill major roles, increased scalability, key people bring their expertise, experience, and networks more autonomy and influence over the innovation process.||More formalized and structured than level 1, increased scalability, decreased reliance on the owner.||There is a lack of formal processes, systems, and metrics and a risk of losing knowledge and capabilities if key people leave.|
|Level 3: Systems-driven||Policies, procedures, and metrics provide a framework for innovation, the innovation process is structured and standardized, with clear roles and responsibilities, stage-gate reviews, and performance indicators.||Enhanced scalability, more structured and standardized innovation process.||Lack of creativity and differentiation, focus on incremental improvements rather than radical breakthroughs.|
|Level 4: Culture-driven||Innovation process is embedded in the culture and values of the organization, everyone is encouraged and enabled to contribute ideas and feedback, flexible and adaptive innovation process.||Ultimate scalability, continuous improvement, experimentation and learning from failures focus on creating value for customers and stakeholders.||It may be difficult to achieve and requires a strong team of people dedicated to continuous improvement.|
By using the Innovation Value Pyramid as a diagnostic tool, product managers and their teams can identify which level they are currently at, what are their strengths and weaknesses, and what are gaps they need to close to reach the next level. By doing so, they can design a more effective change management strategy to address their problems’ root causes rather than treating the symptoms.
Here are some tips on how to use the Innovation Value Pyramid to improve your change management strategy:
- Start by assessing your current level of innovation maturity using a self-assessment questionnaire or an external audit. Be honest and realistic about your situation, and involve different perspectives from your team members, customers, partners, and stakeholders.
- Identify your desired future state by defining your product or project’s vision, goals, objectives, and success criteria. Consider what level of innovation maturity you need to achieve to deliver value to your customers and stakeholders.
- Analyze the gap between your current state and your desired future state by identifying what the barriers and enablers for change are. Consider the technical, organizational, cultural, behavioural, and environmental factors that affect your innovation performance.
- Develop your change management strategy by prioritizing and planning the actions you need to take to close the gap. Consider what resources, capabilities, processes, systems, tools, incentives, communication channels, training programs, etc., you need to implement or improve.
- Execute your change management strategy by assigning roles and responsibilities, setting timelines and milestones, monitoring progress and results, managing risks and issues, celebrating successes and learning from failures.
By following these steps, you can create a detailed and thought-provoking change management strategy that will help you avoid product failure by understanding your current state.