In my last post, I shared the primary insights you need to pull together a Now/New/Next portfolio and get started on making sense of where you stand in the market. In this post, I’ll share how to use those insights to make sense of what to do about it.
For most of us, there is no shortage of problems to solve or great ideas to consider. The trick is – and always has been – to figure out which changes will make the difference for your customers and for your business. Now/New/Next is ultimately about framing your options and giving you a dose of serenity, courage, and wisdom to make the tough decisions. We use the insights and measures we’ve collected to arrange the experiences and capabilities under consideration into six manageable groups and, finally, to balance the portfolio to fit your limited time and resources.
We’ll start with the six groups:
Parity experiences are those that you and your peers are all delivering to an equivalent degree. These are common, often unnoticed experiences that customers quietly expect in their normal interactions. For example, an online shopping experience is as familiar with most shoppers as checking out in a physical store is. Browsing, adding to a cart, and checking out in a browser follows a pretty regular pattern that is just expected at this point. But over time, there are new elements to that experience that also become expected, like the ability to take different payments options or to pick up my order in a local store. This is why experiences in the Parity bucket need constant attention to maintain that parity status.
Table Stakes experiences are similar to Parity – except you’ve somehow slipped behind. Either everyone but you is doing it (talk about peer pressure!) or your version has degraded in some way. The latter is the case with most of our clients, and unfortunately client satisfaction or product quality issues are pulling those experiences much lower than most organizations realize because the expectations and unspoken needs are so much higher in the Now zone. This is why the attention on Table Stakes experiences is to get to the root cause and fix them.
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Trending experiences are those that you and some of your early adopter peers are delivering. Many of these experiences and capabilities are powered by rapidly maturing technologies that have already started to prove themselves out. For example, some smart electronics and appliances have embedded voice-enabled virtual assistants and connected devices. It’s not always high value, but it looks promising and some of the major challenges have worked themselves out. Trending experiences are typically at a crossroads where you need to decide what to do with them. Are they part of your core portfolio or will they play a niche role? Will this become table stakes some day and we need to just make the investment to mature our capabilities? Or should we go the other way and invest in a risky but innovative direction?
Emerging experiences are where a few of your fast follower peers are delivering but you haven’t yet taken the leap. It’s on your watch list but it’s hard to tell whether this is working out for anyone, so the urgency isn’t there. But the concept is there, and that is why these experiences exist in experimentation mode and are candidates for pilot projects.
Differentiating experiences are those that you and you alone deliver amongst your peer group. These are truly unique experiences and capabilities that make up your unique value proposition and continue to prove themselves, but are at risk from being duplicated or simply made irrelevant as needs and tastes change quickly. Netflix is a prime example of a pioneering differentiator in at-home media, quickly pivoting to content creation as it’s differentiating value as traditional media companies ramped up their streaming services. This is why differentiating experiences need constant protection and refinement.
Innovating experiences are the ones nobody is doing. They are the differentiating ideas that haven’t happened yet. They are the dreams, the crazy ideas, and the happy accidents. Innovations – particularly disruptive innovations – get a lot of attention because they are typically monumentally heroic tales or tragically disastrous lessons. But real innovation is about ongoing, deliberate, customer-focused improvements that come from intelligent and informed investments.
You collected the insights. You’ve sorted them out. You’ve summoned serenity, courage, and wisdom. It’s time to make decisions.
We’ve mentioned “balancing the portfolio” a few times, and what we mean by that is that you need to make choices that include Now and New and Next experiences all at once. How you apportion them and balance your limited energy, attention, and resources is based on some strategic assumptions. We like to start with the 70-20-10 rule to help guide these decisions. Defined in the 2000 book “The Alchemy of Growth,” the model provides a balanced approach for investing your time and resources. 70% of your focus goes to the highest priority experiences, maybe sustaining or fixing what you’re doing now, while 20% would go toward secondary priorities and emerging experiences and 10% would go toward truly disruptive innovations that will put you ahead of the pack.
Now the 70-20-10 split is not a hard and fast rule. Some organizations may find 50-40-10 a better fit. Others, a more risk-averse 90-5-5. It all depends on where your business sits in the market and where you want to take your business. It’s like investing for retirement. If you’re young and just starting out, you might be more conservative in your investment strategy. Older investors who are further along in their career may need to be more aggressive to achieve their goals. The key here is to balance your innovation portfolio in a way that makes sense for your business.
Now/New/Next is a rapid way to know where you stand and bring the Voice of the Market to help you jump ahead to a quick but informed decision point. It works best to focus further strategy investment where you can validate with primary research and traditional business case analysis, and often with prototype and pilot experimentation. If you want know more or know where you stand in the market, I’d be happy to share more.