It depends mostly on the beginning and end point, types of innovation, market context, project resourcing, and team. But the following are approximate timelines for large technology companies seeking substantial growth in new markets:
- < 1 month to generate raw ideas, such as for new products or business ideas (including preparation time), although quicker options are possible
- 3–6 months to turn ideas into mini business cases
- 1–2 years to prepare full investment cases for achieving substantial growth in new markets (with part-time involvement from the team). This includes time to complete the market analysis, define the proposition roadmap, undertake technology feasibility studies, prepare the financials, complete an M&A analysis (if needed), gain management buy-in, etc. Investment cases for near term innovation could be prepared much quicker.
Apart from the challenges associated with new technology developments, conducting accurate market research is one of the most common pitfalls affecting the speed and success of innovation programmes, especially in new market areas. I’ve seen this repeatedly. Market research matters. Failures in market research can delay or even jeopardise an innovation project. It’s something for managers to watch out for.
Market research is a big challenge for most organisations, especially the further out you look. Companies spend too much time looking inside their business (e.g., at R&D) rather than engaging with people in the market – examining customer needs, understanding market dynamics, and keeping abreast of technological developments.
Here are four things you can do to increase the accuracy and speed of market research, and thereby make innovation programmes more successful:
1. Allow for multiple loops of market research
I’ve yet to see a team, investigating new market areas, get all their answers from a single round of research. Multiple loops of research and analysis – primary and secondary – are needed to get enough market insight. It also takes time to know the right questions to ask. Think of a pilot flying over new terrain for the first time: each successive flyover will reveal a new and more detailed map of the land below. Allow for multiple loops of market research in the project plan.
Using your own staff to conduct market research will save you money, but make sure they are properly briefed before conducting interviews with people in the market. If they ask the wrong questions, they will get the wrong answers.
Sometimes teams tell me all the interesting facts and insights they learnt from talking to customers and industry experts in a market research exercise. When I ask for a copy of the interview questions and written-up notes (with the precise responses from interviewees), they look puzzled – there is no formal documented record. Alarm bells go off in my mind. Since decisions will be based on the market research findings, you need a record of the rationale behind your decisions to refer to in the future.
What is revealed by what interviewees do not say is also interesting! This requires careful listening.
A word of caution about market reports: Don’t over-rely on the accuracy of market data. I’ve seen reports show inaccurate data about markets. In my view, the quality of market reports has declined in recent years, even from some reputable brands, so be prepared to make assumptions. Also, if you have partners on an innovation project, try to validate their market research findings. I’ve seen mistakes made when a company naively believes the market data coming from its business partners.
2. Use expert networks to get quick access to the right people with the right insight
Much time is wasted on trying to find the right external people to interview. Tapping into your company’s network can help, but the network will be limited when searching for leads outside your core markets. It can be more efficient to use third-party expert networks to get quick access to the right people. This will save you considerable time. Factor it into your project costs. Gerson Lehrman Group (GLG) is an example of an expert network service provider.
Teams working to find growth opportunities in niche markets often struggle to find accurate market data because the niche isn’t covered by the bigger market research companies. The team has to make assumptions and move forward as these assumptions get validated. This is often necessary not only in niche markets but also in emerging markets. Expert networks may be able to help you by finding the right experts.
3. Expand your reach with Open Innovation and collaboration tools
Open Innovation (OI) is based on the principle that additional value can be created by opening up the innovation process to external parties. Although it is not a new concept, recent developments in software have made OI a powerful and cost-effective way of engaging wider groups of people in your innovation programme. Examples include GE, AkzoNobel’s Open Space, and Bosch’s Open Innovation platform, and there are software vendors such as Qmarkets, Hype Innovation, and PlayTank in Ireland.
I saw first-hand how a group at the ESB (Electricity Supply Board) ran a staff ideas scheme using Open Innovation tools. The ESB is a highly innovative Irish utility with a €9 billion asset base. The ideas scheme generated over 300 new ideas in a short time. Click here for more information.
People are quick to engage with idea initiatives, and they are a great way to build a long list of ideas for your business. The 3inno website has articles describing how to set up a staff ideas scheme using online tools.
Open Innovation tools won’t guarantee the success of an innovation programme. You will get the best results if you treat the software as a tool that is part of a structured innovation programme.
4. Set up an advisory board to challenge you
When exploring markets that are new to your business, consider setting up an advisory board of people who understand the market, can challenge your findings, and will advise you.
Thank you for reading this article - I hope you found it useful.
If you want to grow revenue in current and new markets, and improve how you innovate, contact us on Hello@3inno.com
Director of 3inno
Copyright © 2017 3Inno Ltd. All rights are reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except for brief quotations, not to exceed 250 words, without the prior permission of 3inno Ltd. Excerpts and links may be used, provided that full and clear credit is given to Gerard Harkin and www.3inno.com with appropriate and specific direction to the original content.