Dr Samuel West, the psychologist who created The Museum Of Failure, argues that the best way to drive innovation within organizations is to remove the fear of failure. The fear of failure can lead corporate innovation teams to only pursue safe bets. When innovation teams work on safe bets, it is highly likely that they are simply improving the company’s current products. To explore new opportunities, leaders have to create psychologically safe spaces for people to try new things and fail.
The best way for innovation teams to fail is quickly and cheaply. This means that leaders and teams have to be paying attention to early signals of whether the innovation project is on track. This has been a challenge for both corporations and startups. There is often a commitment to an innovation project that can drive leaders to keep making bets on an idea they believe in. This can quickly become expensive, like in the case of Quibi, which raised $1.75 billion from investors before failing within a year of launch.
Instead of investing in their pet projects, successful leaders manage their innovation portfolios like a funnel. They start by making multiple small bets with the expectation that those teams will go out and test their ideas. The choice of ideas to invest in should be based on clear strategic guidance about where the company wants to play when it comes to innovation.
However, getting an early investment does not mean that leaders are committed to any specific idea. Instead, the early investment provides teams with a chance to generate evidence on whether their ideas can be successful. Over time, leaders can then make decisions about which ideas to kill. There are typically four good reasons to kill an idea during the various stages of innovation.
Lack of Desirability
The first reason to kill an idea is whether there is anybody in the real world who cares about the product or service the team is thinking of creating. What problems are they solving and for which customer segment? Is there a real customer need out there? How do we reach these customers? It is often hard for innovators to accept that customers don’t really care how clever they are. Customers care about their own problems and aspirations. As such, if the team does not have a value proposition that resonates with customers, that idea should be killed.
Lack of Feasibility
The second reason to kill an idea speaks to the technical risks in any innovation project. Does our organization have the capability to create the breakthrough technologies we are imagining? If not, can we find a partner that can help us to develop the technology? A lot of software products may not present that much technical risk. However, for more ambitious innovation projects in the automotive, healthcare or pharmaceutical industries, technical risk can be a genuine concern. If your company does not have the capabilities to create the product or service, there should be strong consideration to killing that idea.
Lack of Viability
The third reason to kill an idea is whether our company can create and deliver the value to customers at a profit. This question speaks to the viability of a team’s business model. Where will they create and deliver value? How will they reach customers? How much will it cost our company to create and deliver value? How much will customers pay? How will the team get to breakeven or profitability? It is distinctly possible to make products people like and lose money doing it. If this is the challenge an idea is facing, that idea should be killed.
Lack of Adaptability
The final reason to kill an idea is whether our company can take the product or service to scale. It is important to note that finding a real customer need is not the same thing as finding a market. There are several reasons a business environment may not be ready for an idea to scale. For example, a product may depend on the successful commercialization of other companies’ innovations before it can scale. In this case, timing is important. It is also possible that the costs of scaling can render a business model unprofitable and unsustainable. If a team cannot solve these scaling challenges, that idea should be killed.
What About The Pivot?
One common myth from the Lean Startup movement is that innovation teams can pivot any idea to success. This is not always the case. Sometimes ideas have to be killed. What the Lean Startup method provides is a process for finding the right ideas to scale and also the right ideas to kill. The goal is not to kill ideas the moment they run into challenges. Teams should be given some time to try different options for their business model (e.g. customers segments, value propositions and channels). The runway of resources that teams have to try these pivots should be known upfront. When that runway comes to an end and the teams are still not showing progress, those ideas should be killed!