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News from International Mgm't Consulting Associates
Mike Wynne's Global Profit Builder
Innovation Series Number Eleven
The 3 T's of Successful Innovation: TEST! TEST! TEST!
August 2008
In this issue
-- Why?
-- Daedalus and Icarus.
-- Love and Innovation
-- The Goals of Testing
-- Concerns and Worry Warts
-- Approaches to testing
-- Organizing feedback
-- Bottom Line and Babies

Feedback is indispensible for successful innovation. No product is ever final, much less ready for market unless we have some idea of user reaction to it.

Daedalus and Icarus.
Story about the importance of testing your innovation before launching it. In Greek Mythology, there is a story about a famous architect and inventor named Daedalus. He designed and built the notorious Cretan Labyrinth. Unfortunately, his reward was to be imprisoned in it with his son Icarus.

Once an inventor always an inventor, so Daedalus came up with an idea for escaping from the labyrinth. He started analyzing bird flight and experimenting with wing designs. In time, he designed two pairs of wings, one for himself and another for his son; the wings were made of bird feathers and wax.

Eager to get going before his invention might be discovered, Daedalus and Icarus put on their wings and began flapping them. They worked! Soon, Daedalus and Icarus were soaring in the sky. It was a delightful sunny Mediterranean day, and the combined joys of freedom and flight expressed themselves with great exuberance in Icarus; he began to fly higher.

Shouting and laughing with joy, he shouted to his father to follow him. While Daedalus was equally as joyful about their escape and the success of his invention, he was also more practical and cautious. He warned Icarus not fly too much higher where the heat of the sun might melt the wax in the wings. The experience was too heady for Icarus who now felt invincible; he ignored his father's warning and climbed even higher.

It wasn't long before Icarus found he had to pump harder to stay in the air; the wax that held the feathers together was beginning to soften. Realizing what was happening Icarus panicked and went into a steep dive to get away from the growing heat of the sun. The dive increased the pull of gravity on the wings (as today's pilots say, "he was pulling more G's"), and they disintegrated plummeting Icarus into the sea where he drowned. The Aegean Sea off the coast of Asia Minor is now called the Icarian Sea in honor of that rash young man His demise serves to remind us all of the consequences of hubris, a common malady among corporate executives.

Which brings us to the 3 T's of Successful Innovation: Test! Test! Test! Granted, Daedalus and Icarus probably didn't have time to test their wings and check their heat resistance. In today's markets, we had better set aside enough time to test our innovations before launching them.

Love and Innovation
Falling in love with our innovations is almost inevitable. It's like parenthood; no worthy parent could be objective about his or her child. We are biased, and filled with hope and expectations. But would we encourage our offspring to go out into the world without some education or training first? Testing our innovations is about educating ourselves to both their good and bad potential.

Most of the disastrous new product failures were the result of unwarranted, almost arrogant company pride and overconfidence. Quite often, that overconfidence is caused by previous successes that create a sense of infallibility. People forget that the worst enemy of future success is past success. Testing helps us regain our objectivity.

The Goals of Testing
The Costco Experience. Have you been to Costco on the day that suppliers are handing out food samples? Apparently, the sponsors of these samples only want you to taste them and tempt you into buying the product. To some extent, I guess it does persuade some people to buy. On the other hand, if they trained the demonstrators a little better, they could gather a wealth of valuable information to be used in adapting and even creating products to match consumer preferences. In testing, as in so many other areas, it is vital to set clear goals.

Setting the goals. Establishing the parameters of our testing goals should determine the following:

  • What we want to find out. If we don't specify what information we should want, most likely we won't get it.
  • How we can best go about getting that information. Surveys, Focus Panels, Samples, Testing Laboratories?
  • Where would be the best venue to find it? Locally? Nationwide? Overseas? Emerging Markets? At Trade Shows? Private Showings?
  • When would be the best time? As soon as we have a prototype or a working model?
  • When should we stop testing and go for a finished product or service?
  • Who might be our best test customers?
  • What kinds of modifications will be needed, and which would be acceptable?
  • What perceptions will our innovation generate?

Concerns and Worry Warts
Why be a worry wart? Some people can worry themselves into basket cases, yet fail to do something about the cause of their worries. Worry is natural; any innovation, no matter how great, will generate a lot of doubts and concerns, but worrying about them does nothing to solve them. That's why testing is an indispensable step of innovation that will either dispel or confirm those doubts and concerns. Among them are:
  • What if nobody likes our innovation? Is it a Go- No-Go decision at that point? Just because test customers don't like a product/service may not be reason enough to kill it.
  • How will we know if the information we get is valid? Maybe we were asking the wrong questions.
  • Assuming it is valid, which elements and benefits will be most important to our customers and us?
  • What if we can't make the changes customers say we need to? Are there other market segments that hold greater promise?
  • Even if we can make those changes, how long will they take, and can we afford them?
  • What if by testing we give away too much information to our competition? How much might too much information be?
  • If we test our innovation in the marketplace, will we lose the element of surprise? Maybe there are ways to avoid this.
  • What if we have over-estimated the size of the market? Even so, does that eliminate the product or service? A narrower market segment may be even more profitable than a large one.

Approaches to testing
The Baskin and Robbins Experience. Have you ever been to Baskin and Robbins? You are faced with a variety of ice cream flavors that are both tempting and confusing. Eventually, one gets your attention more than all the others and you order it. Then you have to decide what type and size of container do you want it in? You may also be asked to choose among a variety of syrups and nuts. At that point, you discover that it costs more than the other flavors, but the difference isn't enough to discourage you, so you stick with your choice and pay for it. Your choice turns out to be a delightful experience, so you decide to come back for more next time you are in the neighborhood.

The following week you pass by the store, and decide to have another ice cream like last week's. To your surprise and disappointment, they don't have it anymore. What happened? They may have been testing a new flavor and, unfortunately for you, not many people liked it so they discontinued it. They were running a test, and you helped with it. Maybe they should have told you so, or maybe even paid you for your opinion. The fact is that by testing the experimental flavor you supplied them with information about the flavor, the type of container, the size, the syrup, the nuts, and the price. Their analysis of their sales statistics gave them the answer they needed (but may not have liked); not enough people liked that particular flavor, and many thought it too expensive and decided not to buy it.

There are many ways of testing products and services, and each can provide you with valuable information about your innovation; here are some

  • Test in secret. Auto manufacturers do it all the time at hidden test tracks.
  • Test in an out-of-the-way market. Depending on the nature of the product or service, a small, remote town may be an ideal place to test products.
  • Test incognito. If a product appears on the shelves without brand identification, it may provide much more objective information.
  • Limit testing to just one channel. Distributors? Sub-distributors. Retailers? One specific industry?
  • Test in an open market but without fanfare. Get it out there without any promotion or advertising to see what reactions consumers may have.
  • Test under a different brand name. Create a temporary, or even a phony Brand name.
  • Limit number of testers, and require confidentiality agreement Making test customers aware that they are part of a special test can often provide more complete feedback.
  • Use a focus panel approach. Several focus panels with different types of potential users.
  • Test only certain parts or aspects. Some product and services allow this flexibility.
  • Test with "give-aways." People love to receive things for free, and are more likely to provide ample feedback in return - provided we ask them the right questions. For example, most tasting samples offered at supermarkets would work better if those dispensing them would ask better questions.
  • Test at various price levels. This is a good way to get a feel for how much people think the product is worth. You nay be surprised to find out that people are actually willing to pay more than you thought.
  • Show only and ask for impressions. Get people to attend demonstrations, and survey them.
  • Test with just one client. This works especially with industrial customers.
  • Send out to testing labs. Independent testing can, but may not always be, more objective.
  • Disguise product and get reactions. The test doesn't have to look like the end product.
  • Ask for opinions about the concept without actually showing the product. A Power Point or a video presentation may give people enough of an idea to enable them to offer opinions
  • Test with pictures or mockups and ask for impressions. Same as above.
  • Let prospects use product without owning it. Test drive autos. Try on clothing. Offer a free consulting session.
  • Run different tests in different market segments. You don't need to test for the same things at all locations
  • Test with different age groups. Reactions can be very different among different generations.
  • Test at trade fairs. A quick way to sample a large number of persons, but risk of alerting competition is also greater.

Organizing feedback
What if they held an election and nobody counted the votes? What if they did count the votes but didn't analyze them for trends? The term Statistics may turn some people off and even scare others away, but they are not rocket science; with little or no training, anyone can use them to great advantage. Surprisingly, many business people who should use feedback, whether it be in the form of statistics or not, underestimate this wonderful source of valuable information and insights. Here are some ways to manage feedback.
  • Speed is of the essence. The sooner we can get the feedback, the sooner we can make the necessary changes and launch the product.
  • Categorizing feedback by different classifications. Grouping information by ages, locations, income levels, right-handed versus left-handed, occupations, intended end use.
  • Statistical analysis. The more you can quantify the test results, the greater the objectivity.
  • Determine validity of data. If any data is questionable, toss it out.
  • Obtain additional information for questionable data. Sometimes questionable data is merely incomplete and getting additional information can be very helpful.
  • Interpret meaning and relative meaningfulness of data. There may be a greater variety of answers to your questions than you anticipated which implies the possibility of different meanings. Further, one must ask how meaningful is the feedback? Be careful, however, that you don't consider it meaningless simply because you don't like it.
  • Make changes, and re-test accordingly. If fundamental changes are required, it may suggest that the concept is flawed, which may demand a total review of the original criteria and assumptions
  • Consider different testing modalities. Spreading the testing over a wider variety of tests may generate a more complete picture.
  • Use feedback data of subsequent tests to make additional changes, and then develop a compelling offering, one that will get people's attention to the product's valuable differences and their associated benefits.

Bottom Line and Babies
Innovation is about trial and error; you try something, find out the impact, adjust accordingly, and try again. Even babies know this. Babies are the best examples of the benefits of testing; they use it all the time to learn new skills. Watch a baby learn to walk. First, it tests standing up by holding on to something for support. Then, it lets go - and plops down on its bottom. Then, it gets up again, grabs on to something, and begins to move in a specific direction while still holding on. Then it lets go, wobbles, and plops down again, only to get up again and keep at it until - that first solo step happens.

Testing is the process of learning from trial and error, and it points the way to successful innovation. Once you have done it, and done it right, you will have the information you need to move on to a successful market launch - which will be the topic of the next issue of Mike Wynne's Global Profit Builders and will complete the series on the Innovation Process. After that, we will return to exploring a wide variety of business, management, leadership, global marketing, and other growth and profitability trends and skills.

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