You can’t plan for success or fail fast without knowing what matters. Organizations that seek to deliver innovation must understand their capabilities with respect to the required elements of a plan necessary to realize the full value of an innovation effort, as highlighted in a recent IOI Partners article. We call these required elements to realize value the “Critical-to-Value” elements of an implementation plan. Understanding and focusing on these elements is key to removing the uncertainty of the success of any given innovation effort.
Innovation is change, and chance and change are linked in multiple ways. There is no denying that chance can play a role in enabling change by creating opportunities, and chance can sometimes bail out an effort that was stalled. However, those who try to make change happen repeatedly as part of their necessary business activities understand that they must endeavor to eliminate chance as early in the project as possible before the stakes get too high. There also is the expense factor; as spending in an effort ramps up, you cannot afford to depend on chance to succeed.
At some point in a project during the implementation phase—where you typically ramp up efforts to execute a plan following some more exploratory phases (which in product development would be called something like feasibility and planning)—you really need to know that these Critical-to-Value elements can be achieved in some way that is acceptable to your value proposition. The main purpose of the exploratory phases is to uncover these elements and understand how they can be accomplished to minimize uncertainty in the success of the effort. While elements such as key market assumptions may need to be validated prior to implementation, others such as a technical development simply need a viable path forward though it may not yet be accomplished.
These elements are critical in that all innovation efforts that fail in implementation do so for one of three reasons:
- a lack of recognition of Critical-to-Value elements (thoughtful identification),
- a lack of commitment to achieving those that were recognized (commitment and focus), or
- an inability to achieve (i.e. a lack of feasibility of) a Critical-to-Value element that was originally identified (process discipline).
This third element is a perfectly acceptable failure mode in the early stages of a project but, as an example in the implementation of a product development after completing the feasibility and planning activities when the organization has committed the significant resources required to succeed, the late failure also becomes very expensive.
Failure Mode #1: Lack of Thoughtful Identification
Let’s look at these failure modes starting with the first: a lack of recognition. A failure of this type can happen for a variety of reasons in truly innovative activities but the probability of this failure mode can be minimized significantly by the use of various project planning and evaluation tools. At IOI Partners we employ the Innovation Canvas™ in concert with appropriate expertise capable of critical thinking relevant to the challenge at hand in order to identify Critical-to-Value elements of an innovation effort as well as to identify areas that may need better understanding prior to committing significant resources to a plan so that they don’t result in surprise show-stoppers. In the early phases of a project these can often evolve as an innovation team’s understanding of the market and the technology evolve. But understanding what is critical to your value proposition is imperative in targeting your limited resources to get the key information rapidly.
Amazingly, many of these surprise show-stoppers result from reliance on key assumptions that are not tested until late in the innovation project.
The key assumption is typically identified but not marked as Critical to Value (meaning its validity would be key to success) and simply assumed to be true until it becomes apparent it is not. Because it is not identified as critical it is not accorded priority, and because it is typically hard to resolve it is ignored. Consequently, innovation teams aren’t really blind-sided but typically choose to continue to make “progress” by working on other important, but less critical, issues in the hope that their key assumption is correct, leaving their chances of success to chance. What should be done once the assumption is made is to evaluate the importance of the assumption to identify whether or not there would be a material impact on the plan if it turns out to be incorrect. If so, this becomes a Critical-to-Value item and would consequently get priority over committing significant resources to other activities. Once identified these key assumptions should either be validated or a defensible assessment made that they support a significant commitment of resources.
Failure Mode #2: Lack of Commitment & Focus
A lack of commitment to achieving a recognized Critical-to-Value element can happen for one of two general reasons that involve a lack of focus or initiative to solve the key problems at hand. The first is similar to the reason that some key assumptions are never accorded critical status—teams tend to work on the easy tangible tasks on a project, such as building a prototype or writing a procedure rather than focusing on the difficult, less tangible but critical things, such as understanding the value to customers of a perceived market need or getting commitment for critical activities from a less-invested stakeholder. In this way, a team can show progress through metrics like the percentage of tasks completed that are easy for all to understand while masking a lack of progress towards the necessary (but potentially more difficult) objectives on a project. After some time, this activity without achievement ultimately leads to management realizing that the project is 90% complete but with 90% of the work left to go. Fatigue eventually sets in and the project either limps across the finish line extremely over cost and time expectations or it is terminated.
The second reason for this second failure mode is that most projects require cooperation among different elements (stakeholders) within the organization that have different incentives related to the effort. Some stakeholders are responsible for the success of the effort and are often the project champion(s) while other functions within the organization are necessary participants but not as vested or may not even see their involvement as a priority responsibility. This differential commitment can be common in matrix organizations but also occurs between different functions within lines of business style organizations.
If there are no alternative paths other than engaging these less-invested functions, the strong project champion will recognize the critical nature of this involvement and take the initiative to devote the required time and effort and even creativity to engage these necessary actors. In some cases, creativity can be deployed to explore alternative paths to success in cases where it may not be the cooperation of the less-invested function but rather the thing they were to provide that is Critical to Value. This can lead to solutions like outsourcing manufacturing if the internal manufacturing team is not motivated to develop a critical capability or bypassing a less nimble human resources organization to engage head-hunters, pursue personal contacts or contract help to acquire a critical skill set. Many projects have failed for lack of initiative by the project team to acquire such a critical capability while waiting around for the organizational elements to motivate themselves.
Failure Mode #3: Lack of Process Discipline
The third failure mode, an inability to achieve a non-feasible Critical-to-Value element, is the one “desired” failure mode in which, if identified early, Critical-to-Value elements can be focused on and resolved (i.e. made feasible or not) prior to commitment of the full resourcing of a project.
This is the goal of failing fast: knowing what is important and addressing it early to determine the viability of a chosen path or to pivot appropriately.
Conversely, a project that fails late in its life cycle with a known Critical-to-Value element unable to be achieved demonstrates a lack of discipline resulting in the most costly and avoidable type of failure. This is why significant innovation efforts like product development activities have feasibility and planning stages to resolve these critical issues into something solvable before committing the full resources of a development team.
The bottom line is that Critical to Value matters. Without understanding these elements of focus for a given project, you cannot hope to achieve one of the two desired outcomes for the innovation effort: (1) to succeed efficiently or, (2) to fail fast. Through recognition, focus, commitment to solving and disciplined decision-making around the Critical-to-Value elements you will leave less of your innovation success to chance.
