How to win the product lottery

Dan:

Hi everyone. Dan here. And this is Tom.

Tom:

Hey ya.

Dan:

Right. Tom.

Tom:

Yeah.

Dan:

I’ve got a puzzle for you.

Tom:

Okay. I love puzzles.

Dan:

Okay, fine. So do you agree that it is incredibly hard to know if a product idea is going to work?

Tom:

Yes.

Dan:

Would you agree that even the best investors out there really are getting it wrong more than they’re getting it right?

Tom:

Yeah. They’re spreading their money wide hoping it pays off.

Dan:

Absolutely. Don’t be tricked by the genius investor myth.

Tom:

They’re fooling you.

Dan:

Exactly. Do you also believe that everyone has ideas?

Tom:

I do.

Dan:

Good. Because that’s correct. They do.

Tom:

I believe.

Dan:

They do. So what we’re saying is everyone has ideas, and no one has any way of knowing if those ideas are going to work. So successful ideas should happen at random, right?

Tom:

Yeah. Well, I mean-

Dan:

Wrong. If they happened at random, Tom, wouldn’t they be evenly distributed across every business ever in the world?

Tom:

That is a fair point.

Dan:

And are they evenly need distributed?

Tom:

They are not.

Dan:

No. There are some businesses that we think are innovation dreamboats, aren’t there?

Tom:

Certainly are.

Dan:

Who are they? The Google’s?

Tom:

Google does well, although it retires quite a lot of products.

Dan:

Fine, okay. Maybe not the Google’s then, but they are kind of.

Tom:

Yeah, there’s some people launching nice stuff.

Dan:

The Apple?

Tom:

Apple do that a lot.

Dan:

Yep.

Tom:

[inaudible 00:02:12] dude.

Dan:

Yep. That’s it. There’s places where you think, oh, they’ve got it. Now, why is that? Because it’s not evenly distributed because there’s other places where you’re like, they’ve never had a good idea.

Tom:

Yes.

Dan:

They wouldn’t know a good idea if it-

Tom:

There’s a lot of people like that.

Dan:

So yeah.

Tom:

See, I don’t know the answer to that, but I have a feeling you might be about to tell me.

Dan:

I know the answer. Well, I do sort of. Yeah. We’re going to discuss it. I’m not just going to tell you the answer.

Tom:

No, that would be madness.

Dan:

But if you listen until the end, you will know the answer.

Tom:

Don’t fast forward. There’s stuff in between.

Dan:

Yeah, don’t go straight to the end. I might tell you the answer at any point.

Tom:

It does that sometimes.

Dan:

Yeah, absolutely. Just because you have to listen to it. Or that’s the deal we’ve made. You’re the listener, I’m the podcaster. What are these innovative companies doing?

Tom:

Don’t know.

Dan:

Well, I’ve got a few ideas about what they’re doing.

Tom:

Cool.

Dan:

I can sum them up in one word each. Should I tell you the full list first?

Tom:

I would, yeah.

Dan:

Okay. I think they’re empowering.

Tom:

Okay.

Dan:

Tom, I think they’re supporting.

Tom:

Yeah.

Dan:

I’d also put forward that they’re capturing.

Tom:

Nice.

Dan:

And they are incentivizing.
Russ: Hi, this is Russ from Lighthouse. A big part of my role is planning and designing usable and effective product interfaces. Check out some of the stuff we’ve been working on recently at wearelighthouse.com/our-work.

Dan:

Empowering. Let’s start there.

Tom:

Yep. A word used a lot.

Dan:

Yeah. By us.

Tom:

By business people.

Dan:

Business people. Yeah. I’m not denying that the four things of business people talk-

Tom:

Bizspeak.

Dan:

This is a business podcast.

Tom:

True.

Dan:

So by empowering, what do I mean? Well, essentially there are things within innovation that you can train.

Tom:

Quite a lot. Quite a lot of it.

Dan:

Yeah. There’s practical skills there. So it’s not just all-

Tom:

It’s not magic.

Dan:

No, it’s not magic. And it’s not all inspiration either. There’s a set of things that you can do. So you might train your staff in how to do kind of user research, something that’s not hard to do that basically can lead to people understanding their customer’s problems a lot better. And by pushing that kind of skill out to the outside facing, the public facing side of your business, you’re much more likely for it to encounter someone that will tell them a problem that might spark an idea. So yeah, there’s just kind of powering up and levelling up your staff generally in the skills of innovation.

Tom:

That sort of skill is, yeah, it’s not learning to code, it’s not something that takes five, 10 years to get really good at. It’s the kind of thing that everyone does all the time. It’s just chatting to people really. But it’s also the kind of thing that can maybe change the mindset of people a little bit. So rather than everyone assuming that building a new product or being innovative means making an app or being some code genius, it’s not really about that at all. And it’s just about, like you say, exploring problems and understanding customers and talking to them.

Dan:

And I think that and the perception you’ve just given there does come from the fact that the innovative companies we think of are often ones that do something technically difficult. And what people fail to see is that yes, in certain cases the technical leap that people have made is the innovation and fine. You’re not going to teach someone how to do that maybe, but in plenty of those places they’ve just got an innovative culture. And that comes from some of the simple stuff as well, like being good at user research, being good at how to test an idea, how to validate an idea. You don’t need to implement it to do that. We’ve chatted about that plenty of times and everyone knows about minimum viable products and the cheap and easy way to see if an idea is going to work. So that would be say empowering. So just pushing out the practical skills of innovation across everyone you can get into, anyone that’s interested.

Dan:

So supporting people. And part of supporting is kind of getting out of the way a bit and kind of removing the blockages to this sort of stuff happening. For me, supporting people means valuing them having the time and the space to collaborate because you we’ve seen plenty of times the most useful rooms to be in, if you’re doing a workshop or something, people from around the business getting together to chat across problems, bringing their different perspectives.

Tom:

Yeah of course. You learn so much from just chatting to someone in a different department who experiences a different customer problem or has a slightly different experience of their interaction with the business or anything really.

Dan:

And you can get inventive with how that happens. We’ve seen it happen in formalised workshops, which we’ve been and done and people get invited from around the business. I know of places that have set up schemes like kind of lunch buddies and things like that where you kind of try and get people to have lunch with people they wouldn’t normally meet with. Pay for that lunch. And once a week they go and do that. Again-

Tom:

I’ve seen other stuff. I’ve seen companies that make every employee in the business working customer services for a day a month.

Dan:

Yeah.

Tom:

So that they’re never far from the customer.

Dan:

Exactly. Getting people to work with each other is a great way of just increasing the chances of that idea happening. Then you’ve got to give people the actual time to work on ideas that they have because there’s nothing more frustrating, and we fall into this trap ourselves if we try and work on our own stuff, is the day-to-day of your work dominates and finding the time to work on something that isn’t as immediate in value. It’s that graph of things that are urgent and things that are important and finding time to work on the non urgent important stuff because that’s the stuff that never gets worked on and make a big difference.

Tom:

Always at the bottom of the list, that stuff. Yeah.

Dan:

So trying to carve out time where people can actually work on these ideas. Giving budget. That depends on how your business is made up, of course, how big that budget would be and what it would go towards. I mean, we’ve seen it where in big organisations where that budget’s gone towards an internal person. So an innovation lead who’s like an evangelist for this kind of thing, who runs that training we were talking about, who gathers together the processes needed for the innovation programme to happen. And that’s where the whole thing’s been a lot more formalised normally.

Tom:

Definitely.

Dan:

That can be a really important role. And of course, budget also can go to external support. So people to come in and facilitate those things themselves if you’re not ready to hire as a full-time position. And of course, if you’re building products, you probably don’t have the skills to do that in house. So you’re looking elsewhere to do that too.

Tom:

Yep. I mean, budget could also mean giving up a percentage of your time as an organisation. We’ve thought about doing that before for our own product work or our own innovation work of giving 10% of our time to work on that kind of stuff is something that’s budget too.

Dan:

Yeah, you’re right. You have to budget. You have to treat it as a project. These things don’t happen if you just say, “Can you fit it in?” Those things always get pushed out in any busy business, which most businesses are. Another thing businesses need to do support is doing the justifying job because innovation does need to be justified. It’s one of those things where people do it, they think great, we’ll do some innovation, we’ll become innovative, but it’s not always a linear road. And sometimes the effort you put in doesn’t pay off at first and then-

Tom:

For sure.

Dan:

Pays off later when you’re least expecting. I think there’s businesses that believe, and we believe, that it is always of value to be doing this kind of thing. But not everyone in the business is concerned with how well trained everyone is at user research or how free to explore their own ideas they are. Some people in business are concerned with, “Are we making money?”

Tom:

Of course.

Dan:

And those people don’t see kind of intangibles like, “Oh, everyone feels more innovative.” They see, “Has any of our efforts paid off?” So this really is up to the business to support the innovation efforts by constantly kind of helping them to justify what they’re doing.

Tom:

Yeah. And I suppose also building a bit of momentum around that as well. Talking about it, showing what benefits that it has brought to the business because you may well find that actually people involved in the idea or the early stage stuff aren’t then involved later on when the stuff actually starts to happen which like you say, could be a couple of years down the line really to see tangible benefits from it.

Dan:

Completely. But you can still, and you can still measure along the way. You can measure progress along the way. You can show the journey and show the value that it’s bringing even before it brings that kind of bottom line value. So I always think it’s up to the business to make sure that people are doing things in a way that can be measured, that can be reported easily. And that’s really good support. Not making people sort of feel they’ve got to fight to work on this stuff that “Oh, you’re just messing around.” Making people feel, “Yeah, this is part of my job and someone is justifying this part of my job to everywhere that matters in the business.” So-

Tom:

For sure.

Dan:

Respected things. So that’s definite support the business can do.
Russ: Hey, this is Russ. Recently we’ve been helping our clients overcome huge complex problems using design sprints. It’s a really interesting tool for us to get in a room with a client, share this big workspace and come up with lots of ideas and solutions for big problems. If that sounds like something that you could be interested in, head over to wearelighthouse.com for more.

Dan:

In terms of capturing, what I mean by capturing is these businesses that seem to have a lot of ideas, they’re actually probably just capturing the ideas they have better. As we were saying at the beginning, was you said at the beginning-

Tom:

It was me, yeah.

Dan:

You agreed with me. Everyone has ideas and it’s about for some companies those ideas never see-

Tom:

Well, most I think. Everyone in a job they care about is going to be thinking about it and that’s natural when you’re presented with a problem in your day job to think of a potential solution. It’s all ideas, but most of them are just going to disappear into nowhere because they’re not captured.

Dan:

Or worse still, they disappear off to another company and that person disappears with them. These ideas are always happening and it’s about can you capture them. And the practical ways, you don’t do it with a net. The idea net.

Tom:

An idea net. I think you get that on Amazon.

Dan:

That would be a decent novelty item.

Tom:

Would be. Yeah. That’s my [inaudible 00:14:03].

Dan:

We’re going to go into a company and be like, “Let’s capture my [inaudible 00:14:09] and start running around the room with the idea net.

Tom:

You’d certainly when that pitch, wouldn’t you?

Dan:

Absolutely.

Tom:

Or get kicked out.

Dan:

Completely. If anyone say wants us to come and run around your office carrying-

Tom:

With our idea net.

Dan:

The idea net. There’s a surcharge for how stupid we’ll look. So basically you don’t catch them in nets.

Tom:

No.

Dan:

What you do is you give people some kind of format to put those ideas into. So I think we always think of the most useful format because it saves time end to end. It’s like the kind of pitch format.

Tom:

Yeah, for sure.

Dan:

Because at some point if these ideas are going to be taking on an action, someone’s going to have to listen to them, believe in them, and invest in them. That is a good format for an idea. And it’s teaching your people that.

Tom:

Yeah, having a bit of structure around how you format that data or that idea is really important because how else are you going to evaluate stuff if it’s not all in a way that can be compared? Because if you had 50 ideas to look through and they’re all talking about different stuff, how do you evaluate them and how would you work out which is good?

Dan:

Getting people when they have an idea to instantly think of how big the value that solving that problem could bring. What’s the size of the opportunity? Essentially, what’s the business case? And we always say the way to that is just to give someone a pitch deck or just a sheet with here are the things we want to know about your idea. And they force people not to just be like, “Oh that’d be cool,” but to be like, “That’d be cool. And it would effect 25% of our customers. And we hear about all the time and people would pay loads more if this happened.” And then you’ve got something that’s becoming something that someone with the purse strings is going to look at it and say, “Hey, this is interesting.” So it’s almost like a way of capturing the idea down in a format that can be re-pitched and then you straight away got something people can look at and you can, as you say, compare ideas with other ideas and see that one is maybe for another day, but this one could have impact right now.

Tom:

Yeah, one might be huge. That’s a long-term project to think about over the next couple of years or something. One might be something that’s testable really quickly that could even get to market really quickly.

Dan:

And then work out where they go. Where do they go?

Tom:

Down the toilet. No?

Dan:

Just pick somewhere basically is what I’m saying.

Tom:

Oh I see. Got that really wrong, didn’t I?

Dan:

I see what you’re saying, but it’s a negative place to … that probably isn’t seen as supporting, empowering.

Tom:

No, it really isn’t. I’m not listening.

Dan:

Taking everyone’s ideas [inaudible 00:16:50] toilet. It’s probably tantamount to bullying to be honest. But yeah, just have somewhere. It could be a piece of software like Trello or it could be just a folder in your Google Drive or-

Tom:

Yeah, wherever you use [crosstalk 00:17:10]. Somewhere everyone knows to look. Somewhere where people will know that they can drop their documents-

Dan:

Some way of capturing these things where they can be reviewed and just make sure people know where that is. Like a virtual suggestion box. It doesn’t really matter. And it depends on your organisation. And it’s one of those ones where it’s probably something people could come up with quite a cool way of how these things work. But it’s got to just be a known place because that’s where you’re going to go back to.

Tom:

And I suppose you want to build a system around people reviewing those as well. There’s got to be some kind of communication around it. There’s no point having a system where you’re capturing ideas, putting them somewhere for people to review and them not getting reviewed because that will make people feel like their work is leading to nothing.

Dan:

Yeah. We’ve seen people turn those reviews into things like, you have Dragon’s Den kind of Shark Tank, I believe they call it in-

Tom:

Oh is that what the US-

Dan:

In the USA.

Tom:

Shark Tank. Okay. It’s work obviously, but it turns into a bit of a day, a bit with where people come along and-

Dan:

I think you’re right, the appearance that these ideas actually go somewhere is really important. And that’s part of the kind of culture and environment you’re trying to create. I mean, there’s lots of other characteristics of innovative companies. Yeah, it’s a wide subject but just one more I just wanted to pick on, which is how these things are incentivized. Because although we’re all creatures of free will, if we’re incentivized to do something, we generally end up doing it.

Tom:

Definitely.

Dan:

And you kind of end up saying there’s two ways to incentivize, I think, innovation stuff. You can incentivize a successful idea that makes money for the company and yeah, that is fine. But the problem with it is if your entire innovation programme is only going to be judged on whether or not it creates some kind of stellar internal startup that eventually breaks off and makes a million pounds.

Tom:

Makes millions.

Dan:

If that’s how you’re judging your innovation programme, then you’re not going to see a lot of wins. That might never happen for a start. And the journey there is going to be full of nothing.

Tom:

Yeah. Well and also that person won’t see a return for quite some time.

Dan:

Absolutely. What you’ll do there is, what’s more likely to happen is rather than creating this million pound mini business, you’re more likely to after a year say that hasn’t happened. Innovation stops here. And that’s the first step towards dying as a company probably. In a dramatic sense, but that is how companies eventually end up going out of business is that they stop innovating.

Dan:

The thing that actually should be rewarded is the journey. The learning. So how to do that? It’s slightly less tangible than has this thing made a million pounds. But you should be rewarding how many ideas get launched or even how many ideas do not launch. Just the activity is what you want to be doing because, as we were saying before, the thing that innovative companies are doing is stuff. There is activity going on.

Tom:

Just things happening is beneficial for those businesses.

Dan:

Completely. And whether that’s tiny micro things like just the atmosphere, the culture, the way the [inaudible 00:20:47] arranged up to their training, they’re having these ideas and capturing, they’re formatting them. The things that they are doing differently are a million little things. They haven’t pressed a button which says we now are innovative. It’s a culture and it’s a lot of small activities.

Tom:

Yeah. I mean, for people who have a formalised improvement programme at their work, that could be something that’s built in there. You’ve got your day-to-day goals in your standard job, why not introduce innovation skills to that as well? How many customers did you interview in the past month or however long, which training workshops did you do to further innovation skills? I mean, a lot of businesses don’t have that sort of system in place, but it’s something that’s worth thinking about.

Dan:

That for me is basically it. Tick those four off and you’re innovative to me.

Tom:

Yeah. I think it’s a nice achievable goal for a business for sure. I mean even if you ticked a couple of those off would be a big change and get you towards or certainly would get you away from where you might be at the moment and gets you towards having a workforce who are thinking about things in different way, contributing to the business in a different way and hopefully long term really pushing it forward.

Dan:

Yeah. Exactly. And just increasing the chances of having those innovative ideas and then it’ll be you that everyone looks at going, “How do they do it?”

Tom:

They got loads of idea nets.

Dan:

Yeah. I’ll tell you how they do it. The idea net. One per employee, waving them around the place. So if you want to find out more about innovation, go to ideanets.com. If you want to learn more about innovation and the things that you can do as a company, head on over to wearelighthouse.com.

Tom:

There’s plenty there.

Dan:

There is plenty there. Blog posts and we’ve got some-

Tom:

We do a lot of this for clients. So we come in, help people up skill their employees-

Dan:

Standardise how they do these idea pitch, capturing these ideas on pitch documents and things like that.

Tom:

Idea generation workshops, design sprints, you name it. There’s all sorts of stuff that we can do to help improve your business.

Dan:

Yeah. And a lot you can do yourself. All right.

Tom:

Until next time.

Dan:

See you later.

Tom:

See ya.
Moderator: Thanks for listening. If you want more product leadership content, then head over to the Lighthouse site, wearelighthouse.com for more podcasts and blogs. To find out more about our product leadership framework, check out wearelighthouse.com/plf. Find us on Twitter using @wearelighthouse. And if you’ve enjoyed the show, then we’d love a rating in iTunes to help spread the word. Don’t forget to subscribe wherever you get your podcasts to see the archive and get any future shows. Until next time, we’ll see you then.