Horizons of growth

In the next few videos, we’re going to talk about innovating inside the corporation. How do you take these things that you’ve learned how to do in week one, week two, and that we’ve started talking about for new products here and apply them in a context of a big huge company, so that it’s an innovation machine. Even if you’re not in a corporation now, you probably have partners that are in corporations. And you might be part of their innovation program or you might work for corporation some day. I also think there’s some generally useful ideas here that have come out of this work on corporate innovation. It is super duper important. Corporations now more than ever are focused on innovation.

You can see this in the form of investments and programs and bold new product launches. Nobody wants to be the the blockbuster video of somebody else’s Netflix. They want to be their own Netflix, they don’t want to get disrupted by streaming video, they want to take advantage of the disruption catalyst that are happening in their industry and they want to capitalize on them. And they should, they should try to do that. Let’s talk about how they focus because that’s the most important part of your job. The product manager’s bringing the right focus to these products to these offerings. I really like this horizon of growth framework that these folks here came up with.

The idea is that corporations have these three horizons. Horizon1 is the existing business, is this a mature business that has a well established product market fit, it’s making money. And your job as a product manager, in H1, is to optimize for profitability and extending the life of your product. Projects have a time horizon of around 6-12 months,

and they should be generating lots of cash for the corporation so that they can invest In innovation. Now, the next horizon is Horizon 2, and the relationship between these is, so let’s take our Cooped Up LLC example. Their existing business would be selling this industrial chicken feeding and watering equipment to big factory farms through a reseller channel that’s their technology that’s their business model. In H2 has either a new technology or a new business model but not both because that’s in H3. So for example with Cooped Up LLC in example of an H2 would be that they take their existing technology and they have a new business model, say a joint venture in China to sell into that market.

These projects have a time frame of around one to three years. You think about it, it takes awhile to get one of these tooled up. As a product manager you kind of interesting job here because you kind of straddle optimising and relatively predictive methods around the mature part of the business. And innovation in the part of the business that’s new. So, for instance, how do we take the things that we know work well in the United States with our technology and market them with a new business model in China? It’s a challenging job, you have to do a little bit of both.

So that’s what you’re up against, or that’s what you’re up for [LAUGH], we’ll say, if you’re product manager in an H2.

And, in an H3, this is a new business model and new technology. In the case of Cooped Up, this would be their backyard chicken coop idea. Because that’s a new technology that’s going to work in a different context, probably in a different way. And, it’s on a new business model a direct to consumer offering which is not that they sell through a channel right now. The key with the H3 here is to do the kind of things that you’ve been learning about in week one, week two when we created. You’ve used the focal points, the four steps for example here in week three. It’s really challenging for corporations. It’s hard.

The key is discipline experimentation, so not just doing whatever, but discipline experimentation but being ready to discard quickly the ideas that aren’t going to work. You kind of need to operate like a venture capitalist where you have an area of interest, you make a lot of little bets. Rather than what corporations tend to do is create one big huge project that they just will not let fail no matter what. And that really works, because innovation, the kind of failure rate on innovation I think it could be much higher. People do some of the things that we’re talking about in the course, but they’re going to have winners and losers. So key thing here is managing a disciplined portfolio.

You can see that kind of the risk and the novelty profile of these increases.

And the investment horizon gets bigger as we go up here. As a product manager, you may find it one or the other of these is kind of your favourite. You may love doing new stuff inside the corporation, you may love staying with the core business and optimising and extending it and maybe you like loaning your expertise to these more longer time horizon things. It’s a real challenge for the business because this is the business, it’s generating money, it’s the kind of thing that everybody knows and it’s really hard to have the discipline to push yourself as a corporation and go up here and take big risks.

In the next few videos, we’re going to talk about ways to manage an innovation pipeline so you’re bringing in new ideas. You’re vetting them appropriately, especially if they’re H3s. And then you’re taking the winners so that you don’t become the Blockbuster Video, you become your own Netflix, and you’re cycling back H3 businesses back down through these horizons and maturing them and growing them. That’s what a healthy corporation, a corporation of the future will do. And you’re a big part of that as a product manager, because you’re the one that’s going to take these products through that pipeline.