The Wide-Lens Principles to Avert Avoidable Product Failures
Recently, I reread Ron Adner’s 2012 book on product innovation titled The Wide Lens: A New Strategy for Innovation. Adner, who is a professor of strategy at the Tuck School of Business at Dartmouth, provides eye-opening explanation on why innovative products failed to become commercially successful. The late Clayton Christensen, pioneer of disruptive innovation, described the book as “a path-breaking perspective on innovation.”
When it comes to choosing the right pathway to product success and the right remedy for product failure, the experts fall into two schools of thought, according to Adner. The first school of thought embraces customer-centricity worldview, where understanding customer needs and solving their problems are key ingredients to ensure commercial success of an innovation. This line of thought is what product creators and innovators are familiar with. In the second school, innovation success depends on leadership capability and organizational capacity to deliver product promises to customers.
It is important to have customers insights. And it is imperative to possess the capabilities to create and deliver solution to customer. Both are necessary but insufficient conditions for success. Adner proposes a more expansive perspective — the wide-lens perspective — in order to avert avoidable product failures. In his book, he narrates absorbing tales of go-to-market failures to make his arguments for the wide-lens perspective, stories like Michelin’s PAX run-flat tire in 1998, Nokia’s 6650 3G phone in 2002, Microsoft Office 2007, Sony’s e-book reader, PRS-500 Portable Reader, in 2006, and Pfizer’s Exubera inhalable insulin in 2007.
This short essay outlines a way of seeing your product innovation ecosystem. The Wide-Lens perspective aims to help you to avert avoidable product failure.
We tend to focus on execution risk of an innovation — or the challenges of developing and shipping a product, as required by customers and also, on time and on budget. However, in addition to the execution risk, the Adner’s wide-lens perspective wants us to see two additional risks, namely co-innovation risk and adoption chain risk:
Co-innovation risk, or the extent your product’s successful commercialization depends on the successful commercialization of other products.
Adoption chain risk, or how much you depend on partners to adopt your product before end customers can receive full value proportion.
For example, you are developing a cloud-based table ordering solution for restaurants. Execution risk encompasses organizational challenges in ideating, designing and developing the solution. Other than the execution risk, your solution depends on the successful commercialization of innovations such as microprocessor innovation, cloud technology, smart devices, apps distribution platform, wireless internet technology, just to name a few. These technological components must become available before your solution can materialize. This dependency defines your co-innovation risk.
You also depend on partners to adopt your product before end customers can experience the value proposition. For the table ordering solution, the end customers are diners. Before the diners can experience the contactless convenience and seamless order-to-payment dining experience, key partners like restaurant owners and POS system integrators must adopt your solution. A failure to adopt by a key partner can lead to disastrous outcomes for your solution.
When it comes to product adoption, benefit and cost considerations come to fore. But product innovators and customers perceive benefit and cost differently. Understanding the difference matters and, Adner wrote, “missing the difference is a recipe for disaster.”
Cost means price of the product for the innovator. But for the customer, cost mean not only the price of the product but also non-price costs. Examples of non-price costs are time and efforts needed to learn to use, uncertainty over innovator’s trustworthiness and potential frustration when using the product.
Benefits, for the innovator, means total benefits delivered to customers. But for the customer, the benefit is relative to available alternatives. Benefits are viewed as added value - the difference between benefits delivered by the product and benefits delivered by the alternatives (or current in-use solution). For example, perceived benefits of an e-wallet solution is the relative benefits between e-wallet and cash payment methods. Understanding how customers perceive benefit and cost can help innovators to craft better tactics and messaging to convince customers (and partners) to adopt your solution.
The wide-lens perspective offers a way of seeing your innovation ecosystem. Product creators and innovators tend to be, rightly so, product-centric execution focus. As Steve Jobs once said: Real artists ship. However, the ability to ship the product on time, on budget isn’t enough to ensure successful commercialization of your product. Co-innovation and adoption chain risks matter too. A thorough assessments of the three risks can lead to a more informed expectations and eventually, a better innovation strategy.