I have said many times that if you follow the proper steps and execute them effectively, anyone can be a successful entrepreneur and run a successful business. However, I also follow that statement with an important caveat. Selection is critical. I mean that the selection of a business concept, value proposition, product, or service determines success or failure. No amount of entrepreneurial zeal, management prowess, or salesmanship will compensate for a weak business proposition or product.
Dr. Robert Cooper, with whom I am a disciple, is a world-renowned expert in understanding why new products succeed or fail. He has studied the subject over the last 35 years, and his insights are contained in his two books, Winning at New Products and the revised edition by the same name. Cooper’s studies have found seven reasons the products or businesses fail and eight critical success factors.
Products or businesses fail because of one or more of the following reasons:
- Me-too or tired new products
- Weak front-end homework
- A lack of customer or user input or market insights
- Unstable product specs and project scope creep
- Dysfunctional project management
- Lack of focus (too many projects in the pipeline)
- A lack of competencies, skills, and knowledge
Dr. Cooper identifies eight critical success drivers:
- A unique superior product – a differentiated product that delivers amazing benefits and a compelling value proposition to the customer or user- is the first driver of a new product or service profitability.
- Building in the voice-of-the customer – a market-driven and customer-focused product and business development is critical to success.
- Doing the homework makes the difference between winning and losing: Due diligence done before development gets underway pays off.
- Getting sharp and early product and project definition – and avoiding scope creep and unstable specs means higher success rates and faster to market.
- Spiral development – build, test, get customer feedback, and revise – putting something in from the customer early on for input often gets the product right.
- The world product – a global product or global concept tailored locally and targeted at international markets- is far more profitable.
- A well-conceived, properly executed launch is central to success, with a solid marketing plan at the heart of the launch.
- Speed counts. There are many good ways to accelerate development, but not at the expense of quality execution.
Reviewing these lists makes it easy to understand why many products or businesses fail. Dr. Cooper advised us during the formation of the International Centre of Agricultural Science and Technology. The takeaway from his advice was that project selection was critical to success, followed by quality execution. During my work with the Innovation Project, I applied this philosophy with a well-defined project review system to select which projects we would invest our time and resources in the hundreds of potential opportunities. Although our success rate compared to the number of projects submitted was low, we could predict early with a 75% accuracy which project would succeed. Consequently, we could use our resources most efficiently to launch winners and not waste time on losers because we could tell the difference at the start.
I believe business success is not a result of luck, a fortunate tailwind, or actions alone but a rigorous market-focused selection process followed by competent execution.