The only truly long-term growth strategy includes innovation and new product development.
New products are the lifeblood of an organization. If you don’t innovate, you will die. Don’t believe me? Out of the companies that were in the Fortune 500 in 1955, only 61 are still on the list. What are you doing to grow your top-line?
Many companies think they have launched a new product by putting a pdf version of the print product online, or because they created an iPad digital edition of their magazine. I hate to break it to you, but this isn’t good enough.
New Product Development is risky and complex – it’s also vital to long-term success. It’s a mix of left brain analytics and right brain creativity.
The challenge is breaking through the natural resistance to change that permeates many industries, including media and publishing. Companies who refuse to change and try new things will join the 439 companies who fell off the Fortune 500.
Here are some best practices when creating new content-based products:
1. The Board and CEO commit to investing in New Product Development
You need a board and leadership team that can resist the urge to focus solely on short-term earnings. Visualize the long-term.
2. NPD goals link to a strategy
According to a study by Dr. Christopher Bart of the DeGroote School of Business in Ontario, Canada, there is a positive correlation between using a strategic mission statement for NPD and success of new products.
3. The team tracks progress toward a set of measurable goals
Set some targets from the beginning and progress movement toward them. Metrics might include: revenue, profit, traffic, email sign-ups, new business conversion, renewal rate. Some leaders resist setting targets, because “they are often inaccurate.” I do agree that targets are often inaccurate, but the purpose is not to tell the future for the sake of telling the future. The purpose is to diagnose where things are working and where they aren’t.
4. The firm uses critical go/no-go decision points to reduce risk
When we link to a strategy and have measurement mechanisms in place, we can make sure we place the right bets, at the right time, on the right initiatives. While it is essential that leadership fully commits capital to NPD projects, it is not essential that the company spends the money all at once. Investment should be made gradually as experiments yield favorable results.