A Better Way to Innovate: Ditch the Focus Groups and Go Beta

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by: John Caddell

According to the Cynefin framework for assessing systems and situations, “probe-sense-respond” is the appropriate way to work within a system operating in the complex domain–where cause and effect are observable only in retrospect. Or where, as a comedian might say, “So many things play a role…. It feels almost impossible to come up with a fixed formula because there are so many moving parts.”

There’s no doubt that developing and marketing innovative products and services operates in the complex domain. There are so many factors–technology, customers, macroeconomics, competitors, etc. Why, then, is the approach for complicated or “knowable” systems–”sense-analyze-respond”–still so often used to develop products?

Exhibit A is the focus group. I’ve participated in half a dozen or more of these exercises in my life, and I can assure you they don’t help product managers develop better products. “CYA” is probably the best outcome from a focus group. And CYA doesn’t do anything to create a successful product.

Is there a better way? Sure. Many companies, especially in the IT space, are using “private betas” or limited launches of new products (in Cynefin terms, “probes”) to get customer feedback (”sense”), and frequently adjust the product on an ongoing basis (”respond”) with the information they get.

This approach is well explained in a new post from Booz & Co’s “Strategy + Innovation” blog (”The Promise of In-market Innovation“) by by Alexander Kandybin, Surbhee Grover, and Nami Soejima. Along with astutely discrediting the research and focus group approach, the authors cover four key areas that are affected by an in-market innovation strategy (Feasibility, Product Development and Design, Commercialization and Branding). They also rightly point out that companies adopting this approach need a very different corporate culture:

To effectively execute the in-market innovation strategy, companies must steer the corporate culture toward a “big tent” product development philosophy. Incentives need to be structured to encourage constant idea generation, and to a large degree embrace (or at least not punish) failure.

I have a disagreement with one sentence the authors write: “With this approach, companies debut a substantial number of new products with limited up-front testing or filtering, and the marketplace itself doubles as the focus group.”

No. The marketplace is not a focus group. It is, in fact, the market. And that’s what makes all the difference.

Original Post: http://caddellinsightgroup.com/blog2/2009/06/a-better-way-to-innovate-ditch-the-focus-groups-and-go-beta/