If you want to be a bad product manager, put all your innovation emphasis on a few groundbreaking projects. Since you need radical innovation, these may be high risk, but that’s what innovation is about, right? You know that you need to innovate, and this is a perfect formula to make sure that you are focusing energy on the most beneficial innovations — those big new ideas that are likely to create the most value.
If you want to be a good product manager, build a portfolio of innovation initiatives. Though many frequently think of innovation as being dramatic and substantial, most innovation is less groundbreaking and more about refining current ideas, processes, and systems. Focusing only on major innovation projects is more risky and neglects the real benefits you can obtain through incremental enhancements.
Of course, some companies focus only on these minor improvements without looking at more dramatic and radical innovations. This is too conservative an approach, destined to leave you playing catch-up as competitors introduce major innovations.
The key is to balance your innovation efforts. In Innovation: The Classic Traps, Rosabeth Moss Kanter of Harvard Business School discusses the mistakes that companies make with innovation and “offers practical advice for avoiding these traps.” She was interviewed by HBS Working Knowledge and shared some recommendations, including:
Look for small innovations, not just blockbusters. Big hits are rare, but too many executives swing for the fences with each new innovation. This not only marginalizes people who work on smaller projects, but also tends to result in projects modeled on existing market successes—that is, not that innovative. Truly new concepts often spring from smaller beginnings.
After decades of researching patterns of innovation success among leading companies, Kanter notes that winning innovators prioritize and balance their investments in new or improved products and services in a similar manner. When listed, they form a graphic similar to the U.S. Agriculture Dept.’s nutrition pyramid. Kanter’s Innovation Pyramid features a few big gambles at the top, a wider set of fresh prototypes and ventures in the testing stages around the middle, and a broad range of early-stage projects and improvements on existing ideas or products at the pyramid’s base. The Innovation Pyramid allows managers to monitor quickly their portfolio of risk. The idea is to have a variety of new concepts in play with varying degrees of risk and returns.
As a product manager, you need to make sure that your product balances these types of innovation. The “incremental quick wins and continuous improvements” that form the base of your pyramid are the bare minimum that you need to keep your product competitive. Add on to that some more speculative ideas, with a few “big strategic bets” rounding out your innovation portfolio. Keeping your innovation efforts balanced will allow you to keep enhancing your product while providing leeway to investigate more speculative opportunities with higher levels of risk and return.