Take a close look at your company’s product and service portfolio. Does your portfolio reflect your company’s business strategy, or is your portfolio loaded with a mismatch of products or services with little potential for growth?
New products and services set the future direction of your company. If your portfolio does not support your company’s business strategy, then who is driving your organization?
A company without a new product/service strategy can easily be directed by its most vocal salesperson(s) or its largest customers. Sure, we all have times when we have to add a small program to satisfy critical customers. But if you do not have an innovation charter, these incremental projects can drain your development resources and alter the future direction of your company.
What is an innovation charter?
An innovation charter directs your development team to the markets and types of projects that align with your business strategy. It succinctly states the focus, goals and guidelines for your company’s product/service development efforts. Below is a brief description of these three sections.
- Focus– This section defines the markets and types of projects that align with your business strategy.
- Market focus – Some may be hesitant to state a market focus for fear of limiting the number of opportunities. However, market focus allows your development team to gain a deeper understanding of the market’s unmet needs, and in turn, becoming market specialists. This deeper knowledge helps your team to deliver products and services that truly resonate with customers.
- Types of projects – This section identifies the types of projects that support your company’s strategy and brand promise. If your company’s strategy is to deliver low maintenance products that are easy to use, your development team should focus their efforts on projects that support this value proposition.
- Goals – The section states the goals for your company’s innovation team such as profits, growth or market status. Some goal examples include:
- % of profits or revenue growth generated from products/services introduced in the last 3 years
- 1st or 2nd in a product category
- 1st to market or quick second
- Specific market share goals
- Operating Guidelines– This section outlines how your development team will select and prioritize projects and any special guidelines about how your innovation team should allocate their time. Some examples of operating guidelines include:
- Criteria or scorecard for ranking projects
- Percentage of development time dedicated to cost improvement projects, platform projects, or “pet projects” (special projects chosen by a team member at his/her discretion)
- Frequency for evaluating development projects to ensure that the projects are still aligned with your company’s business goals and are balanced between cost improvement projects and platform projects
- Percentage of products/services with copyright, patent or trade secret protection
New products/services drive your company’s growth. An innovation charter aligns your development team’s efforts with your business strategy, putting your company’s leadership team back in the driver’s seat.