Product Strategy - How to Out Innovate Your Competitors

Large companies can quickly become vulnerable to their competitors because of a failure to innovate or visualize a long-term product strategy. Their product and design teams get entrenched in the weeds of incremental progress due to the challenges of their internal structure and risk-averse culture, causing them to lose sight of the big picture. Instead of swimming against the tides of these internal challenges, there is an alternative route that can help ambitious executives and their teams circumvent these deep rooted obstacles and protect their company for the long term.

3 Common Innovation Challenges

Before learning how to out innovate competitors, it’s important to understand the 3 main challenges that get in the way of product innovation:

1) Structure: The Feature Assembly-Line

Executives understand why large companies are slow to adapt to market changes and to innovate within stagnating markets. Brant Cooper, an advisor in corporate innovation and New York Times bestselling author, attributes the slow movement to the way large companies are often structured:

“The way we structure our companies today tends to be based on the assembly line of the industrial age. We focus on specialization of trade, and split teams accordingly: marketing, sales, development, facilities, etc. The very nature of that structure is what makes us slow and keeps us from being able to adjust our processes when we get new information.”
- Brant Cooper, in “When Innovation Teams Fail

As Cooper described, the assembly line production and inability to adapt quickly to new information often places companies in a vulnerable position against their more agile competitors. They simply can’t react fast enough to new information. And although some executives might seek to address this by trying to scale a new agile development culture, this option would require changing an entire company’s processes and tools; it’s a high-risk, high cost, and time consuming route that may end up being too late.

Now, if it’s true that large companies are slow to react quickly to new information, perhaps the answer isn’t to try to react faster; instead, companies should try to become more proactive by forecasting, defining, and testing a variety of long-term visions for their business.

2) Culture: Routine Incrementalism

The second biggest challenge to innovation (at any size company) is incrementalism. Companies default to the assembly-line product development not because it is ideal, but because it is easy. It’s easier to take small, safe steps in your product by building feature after feature with the occasional maintenance mode release. These incremental steps are a result of teams losing sight of the product’s future vision and inevitably accrues what developers and designers know as design debt.

Even when executives want to pay down their product’s design debt and create a new product vision, they’re almost forced to work within the incremental development culture. This is clear when reports show that of +670 C-level executives surveyed at large tech companies:

  • 84.9% said innovation is very important, but 78% of respondents focus on incremental changes.
  • 41% of executives said their companies are extremely at risk or very at risk of disruption.
  • 57% of respondents said their companies do not follow formal innovation processes.

           *Source

When executives were asked what their primary innovation challenge was:

  • 57% said fostering an internal culture of experimentation and innovation
  • 56% said juggling competing internal agendas and goals
  • 45% said overcoming middle management permafrost layer
  • 33% said moving forward despite deferred commitment and delayed action

            *Source

These reports tell us what we already know: enterprise innovation processes are often ad hoc, slow, short-term, and siloed across departments. The internal cultural challenges and lack of a formal innovation process makes pushing ideas across an organization extremely difficult.Executives need to step away from their internal challenges and find ways to work outside of their organization to have a chance at defining more proactive strategies, or will risk being stuck in a slow, reactive, and defensive position against their competitors.

3) Communication: Executive Buy-in

The biggest innovation challenge of all in any size company, is communicating why a change needs to be made and how it needs to be done. As the chairman of BMW once famously said:

“Innovation is a willingness not to be understood for a long period of time.”
- Peter Schwarzenbauer, chairman of BMW

Most Innovation efforts turn into long memos and slide decks, and both are often not tangible enough to inspire action to change a company’s product direction and strategy. Without something specific people can see and understand, innovative ideas may die somewhere in a Jira ticket or worse, in someone’s inbox.

Get Around Challenges with Visiontypes

Executives can define a new product strategy and work around their company’s internal challenges by recruiting a small group of experienced product designers or working with a design studio to visualize a new product vision. Marty Cagan, an accomplished product leader and partner at the Silicon Valley Product Group, describes a product vision as:

“…the future [you] are trying to create, typically somewhere between 2 and 5 years out. For hardware or device-centric companies it’s usually 5-10 years out. This is not in any sense a spec; it’s really a persuasive piece. It might be in the form of a story board, or a narrative like a white paper, or a prototype (referred to as a “visiontype”). It’s primary purpose is to communicate this vision and inspire the teams (and investors and partners) to want to help make this vision a reality.”
-Marty Cagan in, “Vision vs. Strategy

Crafting a product vision and turning it into a prototype is a powerful way to explore, define, and communicate a long-term product strategy and get buy-in across a large company. Furthermore, a product vision does not have to be created internally because in this phase the details around execution are not yet important. Internal teams will have plenty of time to discover solutions and gather resources since visions are usually 3-5 years out.

“We are stubborn on the vision. We are flexible on the details”
-Jeff Bezos on Innovation at Amazon

Visiontypes: a strategic tool for innovation

A product vision prototype, also known as a visiontype, is a strategic product strategy tool that has helped large companies out innovate their competitors. As a final prototype, it serves as a north star; giving teams the context they need to align with each other and stay focused on how the company and product is evolving. And as with any prototype, it can continue to be improved upon as new insights arise, giving large companies the footing they need to keep up with their more agile competitors. As a process, creating a visiontype also helps companies:


1) Uncover and Clarify Product Ideas

Creating a visiontype is a great way to uncover, refine, and visualize strategic ideas. By researching new technologies, evolving user expectations, market trends, and competitors, the visiontype process can uncover new ideas and truly bring them to life.

Once an idea emerges, product designers and executives can clarify and refine the idea into something realistic that can be launched within the next 3-5 years.

In the early discovery and research phase, experienced product designers help visualize initial ideas and help define what is feasible and what is not.

With a team of consultants, executives and product owners can get a fresh perspective and bring an idea to life without limiting their inspiration. Sometimes, and understandably so, internal teams might become too concerned about execution too early in the process. Although thinking about execution is important, to really ‘think outside of the box’ a team must be able to step outside of it.


2) Forecast Threats and Opportunities

Each day, there are dozens of reports trying to forecast how a market might change in the next 5-10 years. Betting on a single report as part of a long-term product strategy would be both naive and dangerous. Like trying to predict the weather, the further into the future a report covers, the less likely it is to be accurate.

But what can executives do to prepare? The best strategy would be to hedge bets across a variety of trends and visualize how might a product adapt if trend A, B, or C were to happen. This approach gives companies a playbook of contingency plans and product strategies to deal with threats and tackle new opportunities before these changes occur.  


3) Explore Strategic Acquisitions

When the threat of disruption looms, product managers, product marketers, and executives typically have month long conversations around gap analysis and a need for innovation. These conversations, given the internal innovation challenges, typically boil down to a ‘build vs. buy’ discussion.

To help with the decision, product owners can use a Visiontype to envision how a potential acquisition might look like, anticipate the development costs, and have a working prototype to gauge user feedback and profit potential. All without writing a single line of code.


4) Prepare for New Markets

Before any development begins, executives and product managers can create high-fidelity visiontypes with an experienced UX design team to gauge product-market fit with potential users. They can forecast what technology investments need to be made, what research needs to be done, and what specific audience they might want to build for without wasting resources on development.


5) Predict and Reduce Development Costs

Visiontypes help visualize the product changes necessary to evolve a product without writing a single line of code.

As Forrester’s IBM Design Thinking report states, the costs of redesigning a product after release is much higher than if iterative concept testing were to be completed in the design phase:

Test early, fail fast, fail cheap.


6) Align and Inspire Teams

Jeff Middlesworth, Chief Product Officer at Bloomberg, described Visiontypes as the best visual for where the company and product is going. It gives an entire company a north star and helps show disparate teams where the company is heading.

It not only gives context, it also inspires teams. Routine incrementalism is a drudgery for everyone from design, product, and engineering to sales, marketing, and customer success. Incrementalism gives teams tunnel-vision, and visiontypes can help everyone see the big picture once again.

Visiontypes Drive Innovation: Cisco Case Study

Visiontypes are a powerful tool that can be created outside of an organization with a few key stakeholders. They help clarify, refine, and communicate powerful ideas that will align and empower your product and design teams with a clear context on where the product is heading. Whether you’re a startup, or a market leader like Cisco, visiontypes can help uncover your next billion dollar idea. Learn how we worked with Cisco to design 5 entirely different products.

https://www.designmap.com/work/cisco
DesignMap worked with Cisco Strategic Innovation Group to hatch all-new billion-dollar businesses including TelePresence, Physical Security, Network Solutions, Integrated Commerce Workspace and more.