5 Must Have Product Innovation Dashboards

Highlights

  • You can't manage what you can't measure. That's why innovation dashboards are needed to bring real-time visibility to the most important key performance indicators and predictability to the prototyping process.
  • Good innovation dashboards take a less is more approach. They focus on fewer metrics to drive more action. Experienced innovators know that adding more measures clouds what's most important and quickly results in diminishing returns. They also know the human brain can only comprehend up to 5 data points at a time. So, they separate the vital from the inessential and display the highest impact performance measures that are mostly likely to induce action. They know that dashboards only work when they focus the team members attention to what is most critical.
  • The best dashboards permit real-time predictive modeling to show how changes in customer assumptions, buyer insights, price elasticity, market supply and other key factors impact customer acceptance and market adoption. It's this level of reporting that shifts the information value from delivering bad news too late, to delivering the foresight that prevents bad news.
Johnny Grow Revenue Growth Consulting

Innovation prototypes must be continuously measured to show quantifiable progress. However, measuring progress in a vacuum and without connection to a calculated commercialization is a fool's errand.

When working with clients to deliver breakthrough products and services we use at least four types of measurements to achieve a holistic view and progress toward market success. Those measures include market measurement, buyer insights, prototype advancement and portfolio management.

1

Market Measurements

Most innovation strategies start with market analysis to assess new product or solution viability. Key market measurements that we routinely calculate to validate commercialization potential include the following:

  • Market sizing, including the Total Addressable Market (TAM) and individual target or niche markets
  • Annual market growth, broken down by industry, geography, customer segment and other factors
  • Existing market penetration (aka saturation)
  • Customer acquisition forecast models with assumptions for new product adoption rates (by segment or persona)
  • Price elasticity models
  • Competitive analysis, including under-appraised competitor products

Each of the above measures is needed to accurately forecast market share adoption and revenue potential. The below market analysis dashboard is something we created to show how we sometimes categorize this data.

Market Analysis Dashboard

Once the revenue potential is quantified, the team can calculate the cost of sale, including production and Go-To-Market costs. You can then show financial viability and support continued investment in the concept or proposed solution.

Unfortunately, many teams give short rift to market analysis. Common mistakes include the following:

  • Overly broad or inflated market sizing
  • Homogenous or inaccurate customer segmentation
  • Missing price elasticity models
  • Unrealistic supplier quality or speed
  • Incomplete manufacturing costs
  • Insufficient Go-To-Market investments, such as brand promotion, marketing investment, sales staff education, customer service training and product launch, and
  • Under-estimated time to deliver progressive upgrades, improvements and iterative releases
2

Customer Measurements

Innovating without buyer insights and customer intelligence means you are working in the dark. Buyer insights are the headlights to see what prospects will require to embrace and adopt new solutions. Customer insights vary by industry. The below consumer insights dashboard reveals the buyer insights for a retail client.

Consumer Insights Dashboard

Retail purchases are low consideration procurements. They are fast, frequent, impulse purchases generally made without a conscience decision-making process.

In contrast, business to business purchases are medium or high consideration purchases. They incur a very conscience decision-making process over an extended period and involve multiple people or buying committees. A customer insights dashboard we created and used for a manufacturing client is shown below.

Customer Insights Dashboard

The most important prototype measures are not related to iteration cycle time, speed or other internal measures. The most important metrics are customer measures, and primarily how customers measure value when making purchase decisions.

While the top decision-making criteria in the above retail industry dashboard was Customer Experience (CX), the top two decision factors for the above referenced manufacturing client are payback (aka ROI) and risk reduction. A critical prototype measurement to satisfy these objectives is customer mean time-to-value.

Accelerating time to value reduces risk, minimizes operating cash flow, reduces business interruption and demonstrates measurable success by showing the impact to the Profit & Loss statement. For this manufacturing client, payback and time-to-value were measured and improved with each prototype iteration. That ultimately led to an enthusiastic customer adoption. However, we wouldn't have known these top success factors if we hadn't first acquired our buyer insights.

3

Prototype Performance Measurement

Objective measurements are needed to advance a prototype's value from subjective excitement to objective visibility, and then from visibility to predictability. Below is a prototype dashboard we created and used for a Media and Entertainment client.

Innovation Prototype Dashboard

The dashboard displays objective performance measures for prototype value and advancement with each iteration. It also shows how the buyer insights for purchase propensity, replacement propensity and price elasticity impact the prototype success factors.

From my experience in leading or working with innovation teams for many years, I've found price elasticity to be a critical metric that is often missed. Understanding the customers willingness to pay is needed to produce accurate adoption rates, cost models and financial forecasts. Waiting until the prototype is complete before determining accurate revenue potential and cost to mass produce the item creates risks that could have been avoided.

5

Portfolio Measurement

Finally, a holistic view is needed to measure progress and manage risk across your innovation portfolio. Focusing on what we refer to as the Essential Metrics will simplify and accelerate your analysis.

The Essential Metrics separate leading and lagging indicators and isolate the signals from the noise. There is no shortage of things that can be measured, but there is a subset of measures that most drive action to improve innovation programs. Below is one of the Essential Innovation dashboards.

Innovation Dashboard Portfolio Management

Innovation research shows that using too many measures dilutes what's most important and hijacks focus. The essential metrics include a balanced portfolio of the most impactful leading and lagging indicators. They include the measures that most drive improvement and commercial success.

When implementing innovation dashboards, I often get asked how many metrics should be included on each dashboard. The answer is always the same, as many as will get acted upon.

An interesting thing about useful dashboards is that staff spend less time accessing information reporting but leverage the insights to make more changes to the planning and prototyping processes. That's the sign of successful dashboards. If the information is causing operational changes to be made, it's working.

See 5 innovation dashboards that drive the delivery of breakthrough products and services.

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