Innovation is a huge part of Product Management and development and it's one of the reasons Product Management is a great career. Traditionally, innovation is linked to a spark of inspiration or the mind of a genius. But product innovation doesn't rely on these - innovation can be something you arrive at by following the correct steps...and here they are in our ultimate guide!

Step 1: decide what type of product innovation you are aiming for

There are essentially three types of product innovation:

  1. creating something brand new for a newly identified market/need
  2. creating a completely new product or improving on existing products for an existing market/need
  3. creating a completely new use for an existing product

The first type of innovation is rare and more often better described as invention. That's the type you generally associate with a "light bulb moment" or a spark of genius. In fact, even when you think you've found a product like this, when you master the later steps in this article you will discover it probably doesn't fit this category.

Most product innovations fall into the second two categories. If we take the smartphone as an example product, it started by providing the second type of innovation. If we assume the existing need was communicating with people, then it offered the ability to make phone calls, emails, and send messages all in one device. It was an improvement on existing solutions.

But since its introduction, it has largely provided the third type of innovation we identified, by entering new markets and finding new uses as they move through the product lifecycle. It is no longer just a communication device, it is also a professional standard camera, a calendar, a video camera, a games console.

So the first step to innovation is to recognise the different possible types of innovation, and choose which one you are aiming to achieve.

Step 2: identify and measure a need or problem to solve

I could assume that you've found this article because you have already identified a need to innovate on. But then I'd be going against my experience of seeing a surprising number of "innovation" projects that started with the solution and then tried to find the problem to solve.

I've seen this most often in large companies that want to be innovative but don't really know how to be. Rather than putting effort into the foundation of identifying a problem and verifying it through research, they start building something that embraces new technology or mimics a startup, and hope there is a market for it.

There's very little that's innovative about solving a problem nobody has.

There are many examples of products that have failed miserably. Often its down to this very fundamental issue.

So before you start Googling 'blockchain' or 'AI' or worse building a team to deliver a solution, you have to identify a problem you are trying to solve. And then you need to verify that there is a market for solving that problem.

This involves market research - finding the potential customers and speaking to them. And once you've done that, you can then start to define how you will evaluate product-market-fit.

Step 3: try a product innovation framework

This one might seem counter-intuitive, but there are frameworks and processes that can be used to help achieve innovation. The best known framework is called Jobs to be Done. A second framework that I teach is what I call "Dark Clouds".

Jobs to be Done

The theory of Jobs to be Done (JTBD) is that products are hired by people to do a job. And ultimately they will hire the product that does the job best for them. The framework is extensive, and we go into much more depth on our Advanced Product Management course.

But the simple version of the framework is to identify the underlying job that customers are trying to do. It might sound obvious in most cases, but JTBD encourages you, along with customers, to identify the root job.

The more complex version of JTBD breaks down the job into "functional" tasks and "emotional" tasks. At this level, the basic functional job is only one part of what the customer is trying to achieve. How the job makes them feel, or the aspirational aspects of the job are incorporated. This is where the aesthetic design of a product, how it feels to use, and what resonance it has with the customer come into play.

The more complexity you add to how you use the framework, the more opportunity you have for innovation. Some have even gone as far as suggesting that JTBD is less about a functional task and more about the version of themselves that customers are hoping to achieve through the job. I think that's underpaying the use of the simple "job" and making sure that is well defined.

Dark Clouds

Dark Clouds is a much less well-known framework but it is very useful in creating innovation in Product. It gets its name from being the antithesis of a phrase I personally hate - 'blue sky thinking'.

Dark Clouds is a framework that embraces realism and pragmatism. There are various ways to implement it, depending on the type of innovation you are looking for.

I teach Dark Clouds on the Product Management Course and in-depth on the Advanced Course. I also offer workshops on both JTBD and Dark Clouds as part of my innovation consultancy.

Step 4: test product innovation concepts

As with many things in Product, it's often better to do than to think. Getting things in front of customers as quickly and early as possible gives you the best chance to verify your innovations and to be first to market.

So creating the most basic prototype to test your idea and getting users to test it and feed back is the simplest and quickest way to verify what you're doing. Do users find your product or feature helpful? Does it do the job better than other products?

You could launch what seems like the most innovative product you've ever conceived, but if customers don't find it to be better than existing solutions, then it will likely fail. Have you ever heard of Google+?

Step 5: get diverse employees together

You might have heard of the term "hackathon" - it's a very popular concept these days. A hackathon is generally a day or short period of time dedicated to allowing programmers to come up with new working products to solve a problem or address a need. They work, not only because engineers love the chance to create new things, but because they often result in innovative products that companies can build properly and release.

The rise of hackathons is for a similar reason I say “get diverse employees together” - innovation often comes through collaboration, particularly when that is between people with unique perspectives. Companies have recognised in hackathons that engineers have the ability to create things others may not have considered. So how much more powerful could innovation be if they are involved, along with Product, business, and design?

I have found that workshops involving diverse contributors, rather than Product people alone, have a much better chance of producing really innovative ideas that companies can use. As a Product Manager, you are in the unique position of interacting daily with these diverse functions, and you are the person who can bring them together - after all, communication is one of a Product Manager's skills.


For more on product innovation, our Product Management Course covers this and more. I am also available for innovation consulting and training, so feel free to find me on LinkedIn.