Whether you work for a Fortune 500 business or a tiny startup, developing new goods is one of the most challenging tasks you will ever do. It's also the key to long-term profitable growth.
Michael Dalton's book, Simplifying Innovation, is a practical roadmap for unlocking the growth you need to secure your company's sustainability.
As a side note, the book was written in a story style, which we strongly encourage you to read. The 5 Focusing Steps to Drive Improvement that we got from that tale will be the subject of this summary.
Step 1: Identify your constraint
To be successful in your innovation endeavors, you must understand the notion of leverage.
You've probably heard of the 80/20 Rule, which states that 20% of your efforts create 80% of your outcomes.
This 20% is usually always found in your system's limits when discussing innovation.
Even in the most complicated systems, as Dalton points out, there is generally just one constraint restricting your output.
This is true in both large and small businesses.
If you've read Eric Ries' book The Lean Startup, you'll know that the primary idea he teaches is that those that learn the most quickly - by getting their goods in front of customers and collecting feedback - win.
Even if only a few individuals are in the firm, there is typically one bottleneck that slows down the process.
Maybe you just have one developer, and they're usually so busy keeping the system up and running that they don't have time to work on new products or features. This idea applies to huge corporations as well, albeit on a much greater scale.
Rather than one individual delaying the entire process, it may be a group of people who are just unable to keep up with the expectations placed on them by the rest of the team.
You'll notice when you discover the restriction in your organization that there are a number of obstacles to its efficient usage.
This brings us to the next step.
Step 2: Exploit your constraint's capacity.
When you ask your team what is preventing them from getting more out of the bottlenecked sector of your business, they will almost always complain about a lack of resources.
The common excuses are "I don't have enough time" or "We don't have enough money."
The problem, in most cases, is how the bottlenecked resource is used, and adding more resources will just result in more resources being used inefficiently.
Here are some ways to help get your bottleneck cleared.
Focus
This concept appears simple, yet it works: minimize the number of tasks in progress at any one moment.
Too frequently, we fall into the trap of attempting to accomplish too much at the price of completing assignments. So, rather than focusing on five product enhancements at once, focus on just one.
Instead of releasing three new goods next quarter, only one should be released. You get my drift.
Simultaneously working on multiple tasks may seem productive, but focusing on one task at a time will produce better results.
Limit multitasking
As a corollary to the previous point, you should restrict the number of "side projects" on which your bottleneck must work. Administrative duties, minor requests, and anything else that isn't mission vital to the current most significant project falls into this category.
Choose what you work on carefully.
If you're only going to work on one thing at a time, deciding which one to work on is crucial to your success.
In reality, organizations and teams' failure to do so is what leads to the multitasking problem in the first place.
Working on the project that will yield the most return on your bottleneck's time is the best approach to think about it.
Generally speaking, this means generating the largest sum of sales in the shortest time.
Replenish with a customer value lens.
It's time to consider replenishing your project pipeline with more high-value new-product possibilities once you've mastered project execution.
It's easy to make the mistake of starting here, but to get the greatest outcomes, you need to have your procedures and execution under control.
The first stage is to identify your customer's pain points, which are restrictions in completing a task. Alternatively, your clients may not even be aware that they have a problem until you fix it for them.
The Roomba vacuum is one example of this.
While other vacuum makers focused on improving suction, iRobot identified an unspoken demand for the room to get cleaner without manually operating the vacuum cleaner suddenly.
Once you've started to identify the pain points, ask yourself these three major questions:
- What greater value proposition would we provide to the unmet requirement of the buyer or end-user?
- What price would offer the customer an acceptable return on their purchase or investment, given the value created?
- What kind of return would the new product produce for your firm, given that pricing and your projected development and manufacturing costs?
If you were able to answer all of those questions, that project should be up for review.
Step 3: Subordinate to the constraint
"Subordinate to the constraint" is a fancy way of expressing that you should allocate your other resources in such a manner that your bottlenecked resources are maximized.
This equation is made up of two components.
Helping the constraint
Here's one example: you have a developer that is working tirelessly to get new features out.
Rather than maximizing the amount of work your designers and product managers get done in their jobs (such as generating and designing additional goods for your developer to produce), they should identify ways to assist the developer in maximizing their output.
This might be in the form of assisting with work or assisting in the total elimination of some tasks.
Making more efficient use of your non-constraint resources may seem wonderful, but it just offers the illusion of betterment, as Dalton reminds us.
This is one of those instances where your non-constraint resources will most likely push back.
Why would a designer wish to assist a developer with their other responsibilities?
This is when your leadership abilities will show, as you will convince everyone that the constraint's productivity will help the company flourish.
Maintaining protective capacity
Almost counterintuitively, you'll want to make sure that your non-constraints have 20-30 percent extra capacity in addition to helping to alleviate bottlenecks. Why?
Because even the tiniest hitch in the process may transform them into temporary bottlenecks, affecting the entire company's productivity.
Too often, companies will fill up the spare time of a non-permanent worker with meaningless work just to keep them occupied.
Step 4: Elevate constrained capacity
When you complete steps 1-3, you'll be far more productive in your innovation efforts, leading to a better return on investment.
If your company can afford it, now is the time to increase the capacity of your constraint.
Typically, this entails the addition of personnel or resources. One thing to consider is that improving the quality of your workforce may be preferable to increase the quantity.
Putting an A player in a job that used to be filled by a C player may make a huge impact, and the increased production will typically outweigh the additional expense. Two C players are nearly always outperformed by a single A player.
Step 5: Continuous improvement
Although continuous improvement is commonly associated with manufacturing, it may also be used for innovation initiatives.
One of the most common mistakes organizations make is "fixing" one limitation before improving another aspect of the business.
As Dalton recommends, you should consider where you want your constraint to be from the start and work to enhance it.
This is usually the location in the organization where "elevating the restriction," as we discussed in Step 4, costs the most.
Putting It All To Work
Of course, the steps we've outlined are only the nuts and bolts of the innovation process.
But, as every competent leader understands, change is difficult because you are dealing with people.
Change is nearly always a source of anxiety and uncertainty for someone on your team.
Here are some questions you should ask yourself (and your team should ask themselves) to make sure you succeed in your endeavor:
- Is there a problem? Do we have a consensus on what it is?
- Is the proposed solution's direction completely right?
- Is cause-and-effect proof that the adjustments will actually fix the issues?
- What could go wrong with the proposed solution? What are the unfavorable consequences? How can we stay away from them?
- What are the potential stumbling blocks to implementation? What is our strategy for dealing with them?
- Is management dedicated to continuous innovation improvement, or is this just another one-time program?
These are common worries among people. Take little steps at a time, one focused step at a time, and most importantly, include your employees in the process.
You'll exploit the restrictions holding back your progress and reach your goals of generating more money in the future, thanks to the commitment you'll make during this process.
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