I love the movie Margin Call.
If you haven’t seen it, the premise is that it follows a group of investment banking executives on their journey through the decisions they made during the night before the start of the Great Recession. Ultimately, they decided to sell off their portfolio of mortgage-backed securities before anyone could catch up. While a dramatic decision, and one loaded with pros and cons, it was a strategy of survival.
At one point, the head of the bank said something that has stuck with me. He said:
“There are three ways to make money in this business: be first, be smarter, or cheat. Now, I don’t cheat. And while I like to think we have a lot of smart people in this building, it’s a hell of a lot easier to just be first.”
If we apply the above three options to product development, we are faced with the choice between:
- Moving products through research and design quickly with the aim of getting to market faster (being first, or at least faster)
- Investing more time in original research and design in an attempt to outperform competitors with a superior or revolutionary product (being smarter)
- Replicating competitor products and introducing incremental improvements or differentiating factors (cheating, or at least borrowing as far as the innovator is concerned)
All three choices are certainly valid and have natural pros and cons:
The first approach gets you to market quickly, though the initial product may not be exactly right and follow-on iterations may be costly.
The second approach will likely result in a more accurately positioned product that may be more innovative, but it will take longer which leaves you open to being leapfrogged by competitors and getting trapped in a never-ending “catch-up” design loop.
The third is an easy way to introduce a “Me Too” product with the intent of stealing market share from the leader in a specific category, but it doesn’t lead to truly innovative products that might dramatically change your company’s position in the market.
The key to making this choice is in understanding your corporate environment, culture, and team dynamics. In almost every product development function there will inherently be two forces at work – one that thrives on creativity with the objective of pursuing the greatest possible design, and another that lives to achieve the outcome of having launched the product/service.
Our team at Essential approaches client work with a keen understanding of this challenge and the need to strike the right balance between these two objectives.
The business leaders we work with have numbers to hit, launch dates to celebrate, and metrics/KPIs to manage to. Our client’s design leaders are typically driven by the desire to create the most innovative, usable, desirable, and valuable product possible: one that could potentially dominate the market. These two objectives aren’t mutually exclusive, both are extremely important to our client, and both exist on nearly every project we take on.
To make sense of this dichotomy, I think about it in terms of outcome-driven design – design that has its intent rooted in business outcomes. Not creativity for creativity’s sake, but creativity for the sake of launching something into the market that will have a meaningful and measurable impact.
Corporate innovation and product development teams struggle with this tension every day. These teams are often measured by their market impact. They can envision the most amazing user experience, they can design the most remarkable product, and they can reimagine an entirely new way of doing business. However, if those innovations and/or products never see the light of day, or are delayed to the point of being overtaken by competitors, the desired outcomes risk not being achieved, posing an even greater risk to the business as a whole.
To address this in your work, and if you work with outside design partners like Essential, do what you can to make sure you’re working with a team that understands the relationship between design objectives and business objectives. That way you’ll be able to take the right level of risk and make the right trade-offs. If you find your project leaning too heavily toward one end of the spectrum or the other, it may signal the need for a shift on the team to include alternative perspectives or a shift in expectations to ensure goals are met.
Shawn Torkelson is the Director of Business Growth at Essential Design.
Essential Design is an Innovation Strategy & Design firm providing Product Design, Service Design, and Digital Design services to help clients create breakthrough customer experiences.