Deploy Battled-Tested Tools to Improve Your Innovation Strategy

Close-up of toy infantry soldiers recreating a battle scene

When companies embark on new product design, they do so by following many logical, sequential steps. First they gather market research and elicit customer feedback on previous products. Then they brainstorm, prototype, and test promising new concept designs. Next, they develop detailed engineering designs, meticulous financial models and solid marketing plans to support the product. Yet, even after following these steps, final products often fail or underperform.

So the question becomes why? Why do even the most hopeful new products often fail to meet expectations? One common reason behind such product launch failures is the fact that companies often develop and launch new products without anticipating what their competition is doing. Overlooking their rival’s motivations and actions contributes to a high number of innovation-related disappointments, according to research by McKinsey & Company.

Many of these actions fall below the radar. Your competitive rival, for example, might discount prices to encourage customers to stock up on its product rather than trying yours or tie up distributors to steal valuable shelf space. According to the research, neglecting your competition is one of dozens of human biases that subconsciously affect strategic decision-making and addressing this challenge requires tools and processes that help companies “debias” their decisions.

Playing “war games” can yield competitive insights

In the McKinsey story, a consumer electronics company tried to overcome this bias by assembling cross-functional teams of product designers, marketing and sales experts, and supply chain managers to assume the roles of executives in their company as well as their chief rival. The teams participated in a series of war games representing three consecutive holiday seasons.

By simulating the thoughts, plans and actions of their competition, the company was able to gain a deeper understanding of how their innovation assets compare with those of their rivals—insights that helped them better identify, shape and seize market opportunities. By thinking like your rivals, product development teams can identify new components and technologies that their competition might include in future product updates.

Fueled by insights into what the competition might do in terms of new products enables companies to identify a host of moves they can make to seize the initiative—forging new strategic partnerships, implementing new technologies, and tapping attractive new consumer segments to spur growth. In the real-world example above, many of the game’s predictions came true and when the competitor moved as expected with its new product, the company was ready.

Tap into war game mentality to innovate ahead of competition

Give this product-focused war game a try internally by putting together the best and the brightest of all the disciplines involved in product design. To increase the likelihood of gaining the insights described above, be sure and frame questions carefully. Here are a few examples of questions to use as thought starters that were garnered from the experience of the consumer electronics company.

  • How much of a lead or leap—technological or otherwise—must be make in the next generation of our product?
  • How might our new product stand up to the pressures of the existing and, potentially, new competitive landscape?
  • What price point will our product support and sustain?

War games are a tried-and-true strategic tool, yet few companies deploy them to improve their internal innovation strategy. According to the McKinsey research, those that are employing such strategic tools are not only avoiding the problem of overlooking what their competition is doing but also can determine the survivability of their new products in the crucible of the market.

To read more about how you can use this same competitive strategy tool to better make product-level as well as portfolio-level and go-to-to market decisions, read the entire McKinsey article here.

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