Client needs are constantly changing. So is the marketplace. Keeping your business fresh and relevant is one of your primary responsibilities as a leader. But it can be incredibly challenging to know what clients will want to buy from you in the future and where you need to place some bets to stay competitive for the years to come.
What is the best way to approach creating a new product or service? In this post, I’ve given you a step-by-step process to follow that can help you identify your best opportunities. But first, let’s look at some common mistakes leaders make when deciding how to expand the business and develop new revenue streams.
Common mistakes
There are a lot of things you’d like to avoid, if you could, when thinking about launching something new. Here are just a few:
● Going with your gut – One of the biggest mistakes leaders make is relying on gut feelings or incomplete data. It’s tempting to think “I’ve got a great idea” and just go with it, rather than following a thoughtful process that would help uncover potential issues or concerns. Leaders often fall into the trap of confirmation bias – seeking information that supports their preconceived ideas while ignoring contradictory evidence. It’s okay to be excited about your ideas. Just don’t let your enthusiasm squelch proper analysis. (Of course the opposite problem – analysis paralysis – can be just as bad.)
● Groupthink – Another common mistake is not inviting different perspectives from others. This can lead to “groupthink” and a general stifling of fresh ideas. Creating an environment that enables an echo chamber on your team is not going to help you win in the long run.
● Overly optimistic thinking – Here’s another mistake to watch out for: Underestimating the amount of time and resources that will be required to launch a new service successfully. This is most likely caused by optimism bias, which is believing that only good things will happen throughout the process, rather than thinking through all the challenges that very likely might arise. I’ve been guilty of this myself on more than one occasion. This underestimation can lead to busted budgets, costly delays, and more than a little regret.
If you’ve been guilty of making one or more of these mistakes in the past, don’t beat yourself up too badly. They’re common because a lot of leaders fall into the same traps. Just be aware that your thinking can become clouded for any number of reasons. Awareness is the first step to avoiding costly missteps and, instead, making better decisions.
Now let’s look at the right steps you and your team can take to increase your chances of success.
Step 1: Lean in with curiosity
As you approach the process of considering a new product or service opportunity, you need to come at it with a good dose of curiosity. This first step is where your strategic thinking and sense-making skills will have the opportunity to shine.
I encourage you to spend some time reflecting on what you observe in the marketplace. Ask yourself some questions:
● Where are your clients’ pain points? What is keeping them up at night?
● What are you hearing from the front lines of your organization about pressing needs or potential opportunities?
● Where do you see gaps in the marketplace? Weaknesses in your competitors?
● What emerging trends are you noticing in your industry that could bring new opportunities?
● What new technologies are prompting change in how business is being conducted?
● What types of innovations have you observed in other industries that could be applicable in your industry?
These questions, and others that will come to mind as you reflect, should help you begin to see some patterns or connect the dots in a way that leads to ideas. Think broadly and write down everything that comes to you. Stay open at this stage to consider all the “what if” options. Don’t discount anything just yet. The time to narrow down the list comes later.
The important thing right now is to lean in with curiosity to drive deeper exploration and a better understanding of potential.
Step 2: Identify the important criteria
Next, make a list of the criteria you want to use to evaluate your ideas. What are the most important factors to consider that will help you narrow down the possibilities and determine where to place some bets? This is where you will begin to integrate critical thinking into the process to help you analyze your ideas and discern the best way forward.
To get you started, I’ve put together a “Top 10” criteria list along with some questions to ask yourself. These are just thought-starters. You can add more criteria and questions to help you decide what your clients need most as you think through your specific situation.
This step in the process reminds me a lot of IDEO’s framework for evaluating the potential success of a product/service. The framework includes three factors to consider:
● Desirability – Do clients want or need this product/service?
● Feasibility – Can we actually create this and reliably deliver it?
● Viability – Can we make money (i.e., profitable revenue) doing this?
You may have heard of this framework before or seen the Venn diagram of it. If you prefer something short and sweet, this would do it. We used this three-part framework at my agency, Mitchell Communications Group, to help us figure out which new services we should be launching. Out of all the ideas we had (some not so successful), we did end up with a few winners: social media (when it first came on the scene), video, research and insights, and digital communications. This framework helped us get right to the core of the issues, which for us were: client demand, our ability to pull something off, and profitability.
There’s no right or wrong here. You can design the framework or criteria list that will work best for your business.
Step 3: Get your team’s ideas
As I mentioned earlier, groupthink is a common mistake leaders make when considering new ideas. The reason is clear: Once we speak, the rest of the room goes quiet. Voicing your opinion too early in the process will tend to shut down diverse perspectives. No one wants to go against the boss, so you are limiting your team’s best thinking by speaking too soon.
Instead, this step allows you to bring your team into the process more effectively by asking them first to do some independent analysis. You can start by distributing the criteria list and asking each person to come up with some ideas on their own.
Then bring everyone together to share their thinking – any ideas they have come up with, any criteria they felt were particularly important to observe. At this gathering, take a seat in the back of the room/Zoom and let others speak FIRST. Hold your opinions until the end so that others will feel free to throw out different points of view.
Step 4: Test underlying assumptions
Once all the ideas are on the board, challenge the group to think through their assumptions to determine which ones would most likely threaten the success of one or more of the ideas.
For example, if you assume clients want something simple and streamlined, how can you verify that they aren’t really looking for depth and complexity? Or if you are convinced clients will pay $25,000, are you leaving money on the table if the market will really bear $50,000?
It’s not too difficult to test some of your key assumptions. Here are a few approaches:
● Use the Six Thinking Hats brainstorming exercise with your team to bring forward various points of view about – and potential missteps you might make with – each viable idea.
● Talk with some potential or existing clients for their reactions.
● Benchmark what others are doing. Call a few peers in other markets to see what their experiences have been with similar rollouts.
● Develop an A/B test to see which version gets better traction in a short pilot.
Step 5: Consider what could go wrong
Testing your underlying assumptions will not only help you refine your thinking, but it will help you become more aware of the things that could go wrong. This is an incredibly valuable step in the process as it allows you to design back-up plans for the “what if’s.”
Make a list of the problems you and your team think are most likely to happen for each idea. For example, the product/service could have functionality issues, or it might take much longer (or will be more expensive) than you thought to deliver, or clients simply don’t buy it. There are probably MANY things that could go wrong. Sigh. But don’t let that be a downer for you. Just think of this as practicing realistic optimism – hopeful that the idea will succeed and preparing for the things that could go wrong.
Now is also the time to consider how you might handle the challenges that will inevitably arise. How big of an issue is each challenge? Do these things hurt the viability of the idea itself? Have some honest discussion with your team so you have a more balanced view of each idea.
Step 6: Rank order your ideas
Once you’ve got a solid list of ideas and have considered some of the potential obstacles each might encounter, you are ready to identify the most viable options.
Once again, to avoid groupthink, have each team member rank order the options individually. Then compile all the rankings to see if there is any consensus on which ones rise to the top.
Focus on the top one or two opportunities that offer the most potential even when considering the possible challenges that might arise.
Step 7: Design a roll-out plan
Now you’re ready to figure out how best way to get this new product/service into the marketplace. A roll-out plan should include all the expected elements:
● Research
● Design
● Creating feedback loops
● Testing
● Modifying/correcting to refine
● Launch
● Marketing and sales
● Implementation and ongoing support
This is a multifaceted process, obviously, and we can break that down in another blog post (note to self).
For now, I hope the step-by-step process I’ve shared in this post will help you leverage your and your team’s strategic and critical thinking skills to make more informed decisions. Then as you roll out new products/services, you’ll have a better chance to drive the growth of your business and help you remain competitive in the years to come.
