What is Life Cycle Management? Is it managing a product through the plant, the sales channel, or simply creating a new one? The answer is all of these and many others. Simply put, Life Cycle Management is the process of actively managing the creation, sale and obsolescence of a product, service or business model over a set period of time.
Innovation can occur anywhere in a business with just about any type of product, service, process or business model. Today companies are launching new ways of competing in the market using innovation which does not necessarily start with a product. This does not mean the product is not important, it certainly is, however when your product or service is in an already crowded space, other forms of differentiation is what will set you apart.
In the adjacent diagram, Life Cycle Management is focused around six core pillars over the course of a product or service life. Most of these pillars focus around the tactical execution of designing, building and commercializing a product or service. While flawless execution in these phases can give your company a competitive advantage, the focus here is where to start with a new product?
Where does true innovation come from? Where does it start?
Historically it starts with an idea or a concept from someone on the team and evolves into a product or solution your company can sell. Sketches get created, revenue and cost projections are estimated and before you know it, a product or service is underway.
Our experience has shown that innovation really comes from obsolescence. That most individuals or companies are simply looking for a better way of doing something tomorrow vs. today. This concept is simple and in nearly all cases true. If innovation comes from the idea of eliminating something else, then individuals or companies would start the discussion and process at this point of the product lifecycle. Unfortunately, most small to mid-sized companies as well as thousands of large ones, skip this step and head straight to idea creation without really understanding what product or service they are replacing. Here are a few steps that can change the way your company looks at innovation and how to ensure success in the future:
1. Consider all the products or services being offered in the market today. What do they have and what do they lack? Spend the time to understand the broader market.
2. Understand why customers purchase and why they don't purchase these items. If these are the products you are replacing, understanding the customers current likes and dislikes will ensure you are creating a product with features they value.
3. Talk to your customers and your potential customer's a lot. Talking to them before you innovate will ensure you get your product right and that they see you as an innovator vs. a market follower and that your company truly understands the customer behavior.
4. For revenue potential, focus on the current market size of the existing products or services which is being replaced. Is this new market space or existing and is it growing or declining?
5. Assess your capabilities, resources or people within your company. Do you have the resources and infrastructure to accomplish this task? If not, where can you get it? New talent or equipment or 3rd party help?
6. Ask yourself and your teams why your company is innovating in this space or market. Is it because you always have or that the market will continue to reward you if you do?
7. Document a plan which outlines the products that are currently in the market and the ones which your company expect to replace with this innovation.
Creating new products, services or business models does not have to be a daunting task. It should really focus on where you currently are vs. your company goals. Embarking on this change within your organization may take on several forms. Developing new tools, innovative culture and or processes may all be needed in an effort to change the organization in reframing the discussion into one of true life cycle management. The key to success is focusing on new tools, culture or processes as a starting point. Building on the initial focus, adding other areas of focus during this change will further solidify your new strategy. Examples include a new tool strategy with developmental questionnaires for your company. Creating a new process focusing on the importance of asking specific questions related to obsolescence in relation to the new idea and so forth may be another.
Innovating does not always guarantee success, however, starting the process of innovation at the right spot will greatly improve your likelihood of creating differentiated products your customers will pay for.