505: What you don’t know about product innovation limits your influence – with Chad McAllister, PhD

Questions product managers ask me about how to improve innovation Watch on YouTube TLDR Product managers are pivotal in driving innovation within organizations. Today I’m answering common questions I get asked about product innovation and management, including: * Supply-side vs. demand-side innovation * The Business Model Canvas * Strategic planning * Portfolio management * Project selection criteria I also discuss the importance of ongoing learning and professional growth for product managers. By mastering these areas, product managers can improve their skills, boost their influence, and contribute more effectively to their organization’s success. Introduction: The Role of Product Managers in Innovation As product managers, we’re at the forefront of innovation in our companies. We spot important ideas, uncover customer needs, turn concepts into products or features, and work to increase market share. But there’s more to innovation than just creating new products. Innovation is the economic engine for organizations and a key source of new value. It’s about creating an innovation culture that drives growth and keeps companies competitive. In this article, we’ll explore key ideas and strategies to help you become a better product innovator and manager. Supply-Side vs. Demand-Side Innovation: Finding the Right Mix One of the basic concepts in product innovation is understanding the difference between supply-side and demand-side innovation. Let’s break down these approaches and look at their pros and cons. Supply-Side Innovation: * Creates new products or technologies based on the company’s expertise * Often results in “new-to-world” products * Usually needs a lot of R&D investment * Can lead to big breakthroughs but carries higher risk Demand-Side Innovation: * Starts with customer needs and market research * Aims to solve existing customer problems * Generally carries lower risk as it addresses known market demands * Can lead to improvements or new products that better serve customers While both approaches have their good points, demand-side innovation often has less risk and can lead to quicker success. However, a balanced approach that includes elements of both can be ideal for many companies. Examples of Supply-Side Innovation: Product Company Outcome Post-it Notes 3M Accidental discovery of weak glue led to a widely used product Humulin Eli Lilly Synthetic insulin development that initially overshot market needs Electric Actuator Caterpillar Solution developed before a problem was identified, later found use in smaller excavators These examples show that while supply-side innovation can lead to revolutionary products, it often takes time to find the right market fit. The Business Model Canvas: A Tool for Product Innovation The Business Model Canvas is a valuable tool for product managers involved in innovation. It gives a complete view of how a product or business creates, delivers, and captures value. Let’s explore the nine key elements of the Business Model Canvas: * Customer Segments: Define the specific groups of customers you aim to serve * Channels: Identify how you’ll reach and communicate with your customers * Customer Relationships: Determine the type of relationship you want to have with each customer segment * Value Proposition: Explain the unique value your product offers to solve customer problems * Key Partners: List the external partners crucial to your success * Key Activities: Outline the most important actions your compan...