In my article last month, Innovate, one step at a time, I discussed how the process of innovation easily derails during difficult economic times, such as today’s. When creating software and digital products, innovation typically spans many months, and it can become disrupted by unobservable or frequently changing business conditions that make it extremely difficult to form and evaluate viable options. When people can’t see where they’re going, they typically just stop. This is tragic with respect to innovation, since it is innovation that propels business and society forward.
To help explain why tough times make it difficult to keep innovating, I introduced Air Force Colonel John Boyd’s decision-making model called the OODA Loop:
|Source: MindSim Corporation|
Boyd’s articulation through the OODA Loop model of how decisions are influenced and made—and of how to disrupt an opponent’s loop—is very helpful in understanding the different reasons for what is commonly called "analysis paralysis." The gist of the model is that if one cannot make clear observations and form viable options, then the ability to make sound decisions and carry them out effectively crumbles.
Some tough love: Don’t accept the notion of failure
Managing just about any process in tough times is difficult. Nonetheless, I believe we have become much too accepting of product failure. Excuses come easily, since statistically only 1 product idea out of 11 emerges into a new product. It would therefore seem OK to fail since the odds were against success all along. Clearly, this is flawed thinking that simply perpetuates failure.
Products fail for many different reasons. The roots of failure can be found at any point in the product development cycle. Failures happen because information is overlooked, taken for granted, misinterpreted, or acted upon inappropriately or with insufficient resources. Every one of these causes of failure can be tied directly into a failing in one of the OODA Loop steps. Properly navigating the product development cycle always comes down to obtaining solid information, accurately interpreting it, developing viable options, and forming the right conclusions to facilitate one’s own actions, or to favorably influence those of another.
Analysis paralysis is the obvious sign that the product development cycle is off track. Unfortunately, by the time th effects of analysis paralysis catch an executive’s eye, the situation is usually too far out of control to easily rectify. Try to be preemptive. Perform a mid-day check with y ourself every day. Ask yourself, "Am I moving forward decisively and effectively?" If you are not, make solving that problem your top priority.
Instead of focusing this article on the product development cycle from the perspective of how to create a great product, it will focus on ways by which product managers can increase their success in navigating the cycle itself. A great product follows naturally by extension.
Analyzing the product development cycle
The graphic above illustrates the product development cycle as we typically refer to it at Cooper. Other practitioners and academics have their own variations, but our version is indicative of the core elements that are widely recognized.
The cycle begins with an impetus: the discovery of a new technology, with or without clarity in advance as to how it might be commercialized—a great market opportunity identified through some form of market research, an obvious need to retire an existing product that has been eclipsed by the competition, etc.
The Ideation phase focuses on stating the problem and setting a general direction, including identifying plausible options. Concept Development involves converting one or more options into a high-level product concept, describing the product’s purpose, its general use, and its value proposition.
Product Definition clarifies product requirements, which are the base-level functional elements necessary for the product to deliver its intended results. Ideally, ethnographic research and customer modeling inform and support the identification of the key functional elements. This eliminates the waste associated with developing unimportant or quality-compromising features by showing everyone the solid reasons for incorporating the key functions.
Moving forward into Product Design, scenarios are modeled and design principles are applied to generate exact specifications, which are not unlike an architect’s blueprint—they provide all the detail necessary to begin construction. Construction is followed by the Product Launch, in which the product is released for consumption.
Once a product has been in the market for a while, a variety of techniques can be used to assess if the product is measuring up to expectations, or if opportunities exist to take the product in new directions. Executives and product managers can then determine whether to stand pat, perform minor design refinements, commence a major renovation, or move forward to Ideation, beginning the cycle for a new product. The ability to determine the right time to make the leap from an old product to a new one is an important skill. Design consultancies can help at this stage using their diagnostic and research capabilities.
Decision-making within the product development cycle
Following each step in the product development cycle through the Product Design phase, a decision is made to move forward to the next step, terminate the project, or move back to the previous step to bolster research and to iterate previous conceptual or design work. The cycle is deliberately staged to permit verification of the work to date, to validate previous assumptions, and to potentially avoid disaster by rejecting a flawed concept before additional resources are committed. Thus, these decision points are import risk management safety valves.
Although carefully traversing decision points can be tedious, doing so ensures the integrity of the product and the well-being of the company. Note that OODA Loop theory can be applied to any decision point, and can be very helpful in gaining advantage over someone else whose loop is intersecting yours. A relevant example of such a loop owner would be an executive with approval authority over your project. You can boost the success of your project by helping that executive negotiate his or her loop. To do so, you should provide clear information, viable options, and reasonable projections of the likely results of exercising those options.
Let’s take a closer look at the final "go/iterate/terminate" decision, which is made following the Product Design phase. It is implied that if all stages through Product Design are traversed successfully, then no further go/no-go decisions are needed. Through the end of Product Design, all work has been limited to paper or other inexpensive media. The enormous expense of actual construction has not yet begun. By addressing all concerns before entering Product Development, the risk of expensive and time-consuming iteration, second-guessing, and changes of course are eliminated. Hence, this final decision point is arguably the most important, since it represents the last chance to avoid spending the lion’s share of the cycle budget on a flawed product.
Now that we’ve examined the product development cycle, let’s move from observation into analysis and draw some strategic conclusions.
1. Plan to avoid analysis paralysis.
Although it is possible to iterate at each step in the product development cycle, doing so contradicts the objective of moving quickly to save time and money, and to preserve executive commitment. In OODA Loop terms, the worst-case scenario is when any step, particularly the early steps, in the product development cycle degenerate into a war of attrition, in which time, money and patience are exhausted in an endless loop of iteration and indecision. So the big question is, how can one obtain assurance that observations are clear and comprehensive, that acquired information is properly interpreted, and that the best options are formulated to ensure sound decisions at every critical juncture?
To obtain such assurance, product managers must examine the composition of their teams to ensure that all essential skill sets are present. Additionally, all internal and external team members should be involved throughout the entire cycle, especially in the early stages of Ideation and Concept Development, which are about charting a course, unifying vision, generating project participant enthusiasm, and winning initial executive buy-in. Moreover, a collaborative approach should be followed to establish consensus and to make sure all opportunities and constraints are properly identified before the course is set.
2. It’s not always easy to know what step of the product development cycle you’re in.
Considering whether to retire an existing product or begin developing a new one is a critical juncture. Probably 60% of Cooper’s involvement with companies is at this important decision point. Companies sometimes conclude that they need a new product, when in fact their circumstances really warrant a renovation of their existing product. Obviously, the converse can also be true. It is imperative to bring well-honed skills in requirements gathering and analysis to bear at this decision point—the Observation and Orientation steps in the OODA Loop.
At the highest level of triage, product opportunities tend to fall into two categories: 1) making the right product, or 2) making the product right. Making the right product relates to properly defining the very essence of the product; i.e., the purpose it is intended to serve, and the functionality required to best provide that service. Making the product right relates to properly initially designing, or later improving, the usability of a correctly defined product. It is important to know which challenge you face, since this will impact how you build your work plan and how you structure your project team. Determining functionality requires ethnographic and other research methods, coupled with design methods that enable a smooth transition from needs to concepts to requirements to detailed design. Optimizing usability, on the other hand, requires diagnostic skills coupled with a surgical ability to apply very specific design principles to very specific problems.
When addressing usability issues, some user and domain research is helpful, but much less is required than when designing a new product. Generally speaking, the broader the usability problem, the more research will be required. For example, more research may be needed when reexamining an entire navigation schema for a broadly used e-brokerage site than when refining a single-user interface for a network management application. When usability problems are both abundant and serious, the line between design refinement and new product design becomes blurred.
3. Avoid fuzzy terms and clearly articulate your objectives and constraints.
The words "new" and "innovative" have their places at the philosophical or conceptual level, but they are very loaded terms when it comes to establishing work plans. Both terms imply that ideation and conceptualization are needed, meaning that a heavy application of research methods will likely be required. In fact, depending on a product manager’s frame of reference, achieving his or her definition of "new" or "innovative" may actually involve making only minor usability refinements, which typically require little research. Clearly, avoiding confusing terms is a great help when performing the OODA Loop processes of observation and orientation.
In order to form viable options, it’s very important early on to clearly identify your time, financial, and technical constraints. You must avoid fuzzy terms and be direct about just how much of a clean slate you want to begin with, how much of your legacy you’re able and willing to jettison, and how many previous notions you want to challenge about your customers and the purpose of your product. This will determine if you’re really going to develop a new product, or whether you’ll just be refining what you already have. The distinction is important, since there is no point spending valuable resources questioning the fundamental nature of a product in Concept Development and/or Product Definition if constraints dictate that any ideas that would emerge from those stages would not be actionable anyway.
4. It takes persuasion as well as great product ideas to keep advancing through the cycle.
As noted previously, there are many decision points in the product development cycle. Typically, these critical decisions are made by an executive who is not particularly intimate with the project, yet who cares deeply about managing risk and properly allocating resources across multiple initiatives. In OODA Loop terms, the executive’s approval represents a separate loop. Drawing from OODA Loop theory, when someone else has the upper hand, yet is favorably inclined toward you, you win them over through education and coaching; i.e., making it easy for them to provide a favorable decision. Hence, focusing on communicating status, recommending obviously sensible options, and clarifying next steps allows an executive to complete his or her loop with favorable results as quickly as possible.
Product managers can become consumed with detailed product creation tasks, but they need to periodically remind themselves that their project is just one of many potential options to the corporation, and that their project becomes more discretionary the higher up one must go to obtain approval. For example, a million-dollar project may seem like an absolutely critical corporate initiative to an individual product manager, but to the CEO of his or her corporation, it is just one of many options vying for attention and financial resources, many of which will never be granted approval to go full-cycle. Therefore, the product manager needs to be persuasive, which means that he or she must build a project team with all the skills needed to communicate project vision, status, results and next steps. This requires diverse, expert skills from day 1, which may need to be supplemented by outside help.
5. Build separate teams for new product innovation and existing product improvement.
The OODA Loop reminds us that one can only observe and interpret so much at once. This helps us understand why product managers frequently feel conflicted. When focused on day-to-day customer satisfaction problems, they often go into overload and miss long-term opportunities. Issues concerning extending the life of a product or improving its usability to alleviate customer complaints, for example, can become all-consuming. Hence, organizations should give serious consideration to formally separating new product development from the process of refining existing products. By doing so, parallel cycles can be kept in motion for purposes of maintaining user satisfaction and market share during the lengthy period of time needed to run the circuit on a new product cycle. The financial benefits of not losing customers between releases are obvious.
It is important to recognize that product managers are as much in the risk management business as they are in the new products business. Accordingly, they should not underestimate the complexity of the product development cycle. Realistic expectations should be set, and constraints should be clearly communicated. Product teams should be prepared to win executive approval every step of the way in order to keep moving forward in the cycle. Design consultancies should not be overlooked as valuable resources in providing both decision-support tools and expert product recommendations. Brilliant ideas are great, but brilliant results are better.