 When I hear the term innovation and I usually imagine Steve Jobs on the podium at Apple Presenting the first iPhone or introducing the iPod or one of those things or Elon Musk Introducing the next Tesla model These are the examples and these are the names that have become synonymous with innovation and they have pros Disruptive products they have built some of the richest companies in the world they have literally changed the world and They're they're the symbols of radical innovation as Product managers we have a lot we can learn from these innovators, but the biggest impact most of us will have Through practicing incremental innovation So in the next few slides, I'll talk about the elements of incremental innovation the nuts and bolts of the product managers job And why it pays to learn to do it well as As we say in Atlassian good day, and thank you for being here My name is Vlad Zachary and I'll be sharing what I have learned in more than 15 years in technology and product management so Why innovation the purpose of innovation is to come up with new ideas and technologies that increase Productivity and generate greater output and value with the same input So this is a good reason. Let's let's put it into some context According to McKinsey 84% of the executives say that their future success is dependent on innovation At the same time according to Harvard Business School professor Clayton Christensen 95% of all product innovation Fail and according to the startup genome report 92% of all startups fail So right off the bat, we have More than 80% of executives think that their current business models are at risk to be disrupted in their future And despite the this small success rate of the product innovations This is still the number one source for businesses to gain competitive advantage So according to this same McKinsey global innovation survey only 6% of the executives are Satisfied with their innovation performance What's more according to 2017 study of first World House Coopers 54% of innovating organizations kept trouble bringing bridging the gap between innovation strategy and a larger business strategy Where some of the problem areas according to Boston consulting group the top six obstacles for innovation performance Would seem to be mostly related to choosing and executing the best ideas But also a certain to a certain extent the company culture Here is what BCG found In 42% of the cases the development times were too long in 32% They had issues with selecting the right ideas in 31% it they had difficulty with the risk averse culture realization in 25% they experienced lack of coordination and In 22% they felt they lacked enough great ideas and in 20% they struggled with marketing innovations So Since we are on the data here is some more research data that's relevant here According to a Deloitte global board survey from 2016 the board of directors Over-understanding of company strategy is the weakest with regard to talent management and innovation R&D strategy so The main takeaway here is that while companies recognize the value of innovation They're still struggling with how to make it work in other words, there is a lot of opportunity to innovate on how companies innovate and This is going to be our job as product managers Here is some more context by the way according to a 2015 Accenture survey Hooping 82% of organizations run innovation in exactly the same way as they would go about achieving an incremental performance gain in their regular operations This seemed to lead to quite a few different challenges such as 72% admitting to missing critical growth opportunities and 60% struggling to learn from past mistakes So in summary Innovation helps companies grow innovation keeps organizations relevant innovation helps organization innovation helps organizations differentiate themselves and Innovation is possibly the weakest link with the lowest efficiency in reliability and delivering results So let's shift gears and when we talk about what innovation is and how much businesses depend on it. I Need to take a step back and we need to take a step back and take a deeper dive into why we need innovation And the quick and simple answer is because it in a free market economy. This is how a business can achieve a competitive advantage And here I would like to share the framework for competitive advantage there and spend some time talking about the why of innovation This is a diagram from the jobs to be done framework created by Anthony Wolwick Let's go through these quadrants very quickly top left is the differentiating strategy So businesses pursue this when they discover and target segments of customers with a new product or service That can do the job significantly better Examples of successful differentiated strategy include products like the Nespresso coffee maker the iPhone the Whole Foods approach to organic foods the the Bangor no-off sim headphones BMW cars Dyson vacuums etc You I can sure you get the picture What these pros having common is that they get the job done significantly better and this is why They get to charge higher prices The innovations that these pros bring are creating strong competitive advantage for their companies And so this is one of the reasons why innovation for them is so essential second one top right a Company pursues a dominant strategy when it targets all consumers in the market With a new product or a service that does the job significantly better and for significantly less money Examples here include for instance Google search Uber, but also for instance Netflix for a while had a dominant strategy The innovations of products like this are creating dominant competitive advantage, and this is why companies pursue them The innovation required for dominant designs came at capturing the allegiance of the whole marketplace The next box but I'm right. This is the disruptive strategy This is when a company targets Over-served and new customers with a product that can do the job for them more cheaply and not as well as the competition Examples here can be Google Docs compared to Microsoft Word. It's free. It does the job a little less sophisticated way, so Dover Shave platform instance compared to Gillette The innovation with these type of strategies and focuses on delivering a more basic experience for less money So this is another way that innovation helps companies succeed in the marketplace The fourth box on the bottom left. This is the discrete strategy This is when a company offers an inferior product that gets the job done worse And they offer it to a restricted customer for more money. Here is an example to clarify how this can exist drinks and snacks at sporting or entertainment events We have restricted customers who have no choice but to pay five to ten dollars for a bottle of water. I Don't know that there is a lot of innovation We're talking about for these kind of situations But it is a model that helps companies maximize ROI and this is another reason to innovate and think out of the box And by the way, there is also that this last box the circle in the center the sustaining strategy This is when companies offer slightly better new products Which get the job done slightly better or for slightly less money So there are many examples for this kind of strategy and the innovation. They here is definitely of the incremental type So to summarize companies innovate so that they can Successfully pursue different competitive strategies in the marketplace and all of this is outward facing all the reasons for innovation We talked about so far Or about the customer how to win the competition for the customer and it's nothing always this is this is great but but there is one more reason and It's really important to mention and when done right innovation will have a positive impact on the company culture so Here is a few quotes. I'm gonna read for you. You don't build a business You build people and then people build the business ziggler If you take care of your employees, they will take care of your customers and your business will take care of itself Jw bill married Clients do not come first and please come first if you take care of your employees, they will take care of the clients Richard Branson So How do we build people? In my opinion in my experience the answer is question has a lot to do with why innovation is so important in today's business there are many aspects to building people up and to helping them succeed in their careers and Empowering people to create to innovate to bring into existence new new more exciting more valuable products features services This is what innovation is and this is how we help people grow and then as a result They create and implement successful innovation strategies that take care of the business This is where culture matters. This is where as we saw before most organizations admit they're lacking and This is where we as product managers have the most opportunity to have an impact So Here you mentioned this that's step into another kind of definition going deeper into the what is innovation all about and We're gonna look at the four piece of innovation paradigm innovation This is some basically based on the book the structure of scientific revolutions where physicists and Philosopher Thomas Kuhn introduced the concept of paradigm shift as a fundamental change in the core concepts values and practices of a scientific community or discipline So similarly paradigm shifts paradigm shift innovations Drive and sometimes both drive and Transform informed are informed by the shift that they may already be Happening in the marketplace And an example of paradigm shift is when Apple introduced the iPod the music delivery was forever changed Because of that other paradigm shifts later like Spotify became possible These paradigm shifts Happened when the right conditions are present of course and a tipping point in both technology and markets is reached and the innovation Then can cause and simultaneously lead paradigm shifts the next one is process innovation and this is when Change this is a change in the way a product or service is created in order delivered Process innovation could mean introducing greater automation in the manufacturing process Rethinking best practices and supply chain management or even changes to how improvements are measured it's important to mention that process management is mainly about optimization and Identifying the key drivers of optimization will be critical position innovation from a business perspective position is The products or services positioning within the marketplace Position innovation creates a change in the context in which the product of services are introduced or positioned in the marketplace and thereby changing the perception of the consumers For instance a little known fact the massive global success of the Marlboro brand Started when this brand switched its positioning It was initially a brand of cigarettes targeting women Then through the introduction of the legendary Marlboro men advertising the brand switched its positioning and That proved to be quite successful as the brand became a symbol of you know cigarettes for tough men and this way a global leader Product innovation this is perhaps the most self-explanatory of the four-piece product innovation is about creating new or making changes to process services That their organization offers and this is where most of us will have the opportunity to practice innovation and have an impact so we're discussing What is innovation and Different aspects and there is one critical aspect that I I want to specifically address The new in innovation is pointless if it lacks improvement Any anything that's introduced as a new feature or a new product needs to be addressing this This is where businesses struggle the most how to bring about a meaningful value-based cycle of innovation in the many obstacles. I'm sorry the many instances It's because of the old silo based Thinking and the divide and conquer approach that focuses on the team success and in the process sometimes It fails to account for the larger product or the larger company strategy So how we measure success in our narrow team focus needs to align and contribute to the global purpose of the product the service the company So In summary new has to equal improved and how do we measure improvement the answer to this question becomes critical to how we measure success Oftentimes as product managers, we are encouraged to keep a narrow focus and Our own piece of the product is what matters the most This is necessary in larger product organizations to avoid duplicate work and to allow for deep learning and subject matter expertise in some areas but sometimes As a result organizations create more issues and the main one is they lose focus of the problem They are solving we as product managers. We have all been part of this we get together the ideation or brainstorming meeting and Before we have any solid or shared understanding of the customer problem. We're solving we start listing ideas of how to solve it and In everybody's head there is a slightly different version of what exactly are we solving for and very soon It's only human nature. We we start falling in love with our ideas and we build solutions around these ideas And and we do everything we can to make these solutions work So so this is why it's critically important to pick the right framework for product innovation And by right, I mean the framework that will allow your team to keep relentless focus on the customer problem something that you're working on and Will also allow your organization to align around a value-driven approach to measure success across all teams So Speaking of frameworks, there are conceptually large number of successful approaches to making innovation work You can see similarities and similarities in many of them But the key takeaways here is pick the framework that fits your needs and then Experiment experiment with the few to see which one produces the best results The ones that I'm presenting here for instance on the top left This takes into account the market weaknesses the internal strengths of the organization of the business and Adjusting possibilities and then works from there to deliver the innovation The next one is from the design thinking foundation and this is basically Starting from empathize and define. This is the step. These are the steps where You know, you don't define a solution. This is where you define the customer products And only after you have gone through these first two steps of understanding the customer problem the customer emotions and all that Then you start ideating and then do the prototypes testing etc. Etc. And as you can see with those these Arrows and lines that it's an iterative process the last one that I'm presenting here is a design thinking framework from the United Nations and Again, you can see in the in the first phase discovery phase, you know, we seek to understand the human needs that are involved and Then the reframe and define the problem in human-centric ways the first two steps are about basically the problem So all in all frameworks are about helping us as a team and as product managers innovate with One core thing in mind. We have to fall in love with the problem not with our solutions and Speaking of frameworks There is another framework that I found very useful and very helpful in my In my previous projects and my previous jobs and this is the nine box prioritization framework. This is for when you have way too many items on your product backlog and This is a relatively simple way to make Things clear and to basically communicate the value of the priorities that you are choosing as a team On the vertical you have the severity of the problem. So at the top of this They're gonna be problems that essentially They're so severe that the customer is not going to do business with us anymore And on the horizontal we have the total size of the market that this Feature or issue or whatever is addressing If it's a small number of people then it's on the left if it's more than 50% then it's on the right so this is the kind of priority that As a discussion point every every team can go through their backlog and try to place each of their their features and backlog items into into a frame frame like this and very quickly the items that are Important and need to be worked on will surface this way So in any case whatever framework you decide to use remember that as Product managers we own the outcomes for our innovations and a hundred percent of these outcomes will be validated by the market So so it's essential to plan innovation with this in mind What is the fastest shortest way to have an impact on the experience and satisfaction of your customer? How can you help them solve their problems faster better cheaper and here is some more market research data points some more context According to a survey conducted jointly by MIT and Deloitte 81% of respondents a digitally mature company cite innovation as a strength of their organization Compared to only 30% from developing outfits and only 10% from early-stage companies. It's kind of counter-intuitive, but it's good to Keep in mind According to a Gartner survey the top drivers for innovation today include enhancing customer experience with the 3% Driving revenue growth with the 3% and developing new products and services for the 5% A nursing young survey identified that more than one quarter of the C-level executive survey Said that they have a designated innovation leader such as a chief innovation officer in place at their organization 42% of a say that they will create such a role to foster innovation 65% of high-growth companies plan to collaborate with customers during the innovation process Compared to 54% of other companies. This is a survey by Accenture 86% of respondents from a digitally Maturing company said a 10% or more of their time at work involves the opportunity to experiment and innovate this is from an MIT management review and Deloitte survey and 91% of marketers surveyed are leading and supporting innovation initiatives 62% said they are solely responsible for such initiatives and 62% of high-growth companies plan to invest in technologies that lead to higher rates of innovation compared to 54% of other companies So in other words Innovation has always contributed to better business and better serving the customer needs and in the future businesses Will rely more and more on innovation that can deliver results reliably and in a predictable manner So another reason to learn how to innovate effectively in the context of business and technology So to wrap it up. Here is a list of key takeaways and key ideas from this in no particular order The new innovation needs to equal better Otherwise companies will see these diminishing results How we measure success in our narrow team focus Needs to align and contribute to the global purpose of the product the service the company As product innovators we own the outcomes. So let's plan accordingly Companies innovate so that they can execute successful business strategies And a hundred percent of the success of the business strategy is going to be validated by the customer and a key takeaway Successful the business will come from building their employees up and giving them the tools to serve their customers better a Culture that empowers the employees to innovate will be a winning culture This is the main role of innovation This is the reason why employees work hard to make businesses successful innovation is what brings meaning to the workplace and Last but not least in order to be successful at innovation Make sure it is everybody's job Blameless culture is difficult to implement But it will encourage everyone to practice and to participate and to contribute and this is when We will get the best results for the organizations and for the customers. So and Obviously falling off with a problem not just your solution Thank you for your attention. Thank you, and I appreciate the time and if you want to learn more Visit us at product management team on the web