While both Innovation and Product Management share many similarities such as experimentation and the ability to make decisions based on data, there are also key differences that justify establishing the role of an Innovation Manager in a product-driven organization. In this post, you will see that Innovation Management requires a higher degree of experimentation, comes with a higher risk of failure, and can only be successful if it is given the resources that it needs to operate outside of the business as usual. You will also see that introducing Innovation Managers will not discourage Product Managers from being innovative, but rather fosters a culture of innovation within the organization from which Product Managers will directly benefit as well.
Organizations that struggle with innovations typically have not given innovation the priority that it needs because it does come at a cost. Innovation Managers (IMs) are people dedicated to drive the innovation strategy of a company. A common misconception is that IMs are no different than Product Managers (PMs) and, consequently, it should not be necessary to establish the role of an Innovation Manager. Another argument against IMs is that establishing their role would discourage PMs from being innovative. While, indeed, the IM has the word “Innovation” as part of the role title, it does not preclude PMs from being innovative. The difference only lies in the focus, i.e. the universe of the PM usually revolves around an existing product with a proven business case as well as an established customer base. This existing product needs to be maintained and evolved based on customer feedback and market trends. As a matter of fact, evolving an existing product may very well require the addition of innovative features which is why every PM should be curious and eager to strive for innovation, regardless of whether the company employs IMs or not. Still, the reality is that a PM spends approximately 80% of their time on business as usual, i.e. there is a huge backlog to be groomed and prioritized, there are operational incidents to be taken care of, there are customer requests to be reviewed, and there is technical debt to be managed, just to name a few. A PM can then only spend the remaining time on innovating the existing product, i.e. which new features can make a difference to the product, increase customer satisfaction, and unlock more revenue growth? In that 20% of their time, the PM performs tasks akin to that of an IM, namely conducting market research, experimenting with a new feature, obtaining data-driven insights that will shape the product roadmap and drive business goals. However, big disruptive innovations will not occur using this approach and it is not the PMs fault.
A popular quote is “what you focus on expands“, meaning that the more time is spent on a specific task, the more value will come out of it. It is completely unrealistic to assume that disruptive innovations can happen as a side-job. Disruptive innovations are, by nature, shaking up an industry with a new business opportunity, a completely different approach to get something done. Innovating on a feature level, while without doubt important, simply will not get you there. This is why companies that are serious about innovations establish the role of IMs within their product teams to give innovation the time it needs to flourish. Have you ever wondered why it is the startups that typically disrupt the market with an innovation? The answer is simple: Being a startup, there is no existing product that needs to be maintained and, consequently, people can spend the majority of their time on new and innovative products. In fact, these people are acting as IMs already without calling themselves that. An IM should spend at least 80% of their time on market and technology research, coming up with hypotheses about new business opportunities, and validating or falsifying them by experimentation with Minimum Viable Products (MVPs). That is exactly what a startup is doing where there is no legacy product that needs to be maintained. However, as a startup matures and their proven product grows, operational work will naturally claim more and more resources, forcing the IM more into the traditional role of a PM. This transition happens slowly and is perfectly normal and inevitable.
If a company wants to remain innovative at heart, it should set up their organization such that this transition is supported by the team structure. A suitable team structure would be to establish an Innovation Managment team that can operate as an independent unit but still is closely connected with the Product Management team. This structure will enable both PMs and IMs to focus 80% of their time on what is required without compromising. Once product-market-fit of an innovative product has been validated successfully, the IM will hand over the product to a PM who then becomes the new owner of the product. This way, the IM will be shielded from the inevitable operational work that every successful product involves, and the IM can now repeat the aforementioned process of research, establishing hypotheses, and experimentation, allowing the organization to keep its innovative wheel spinning and remain a pole position in the market, while PMs will have sufficient time to take care of the product and ensure customer satisfaction with the product stays at a maximum. It should be noted that in this setup, PMs get handed over innovative products and, thus, can also continuously get to work on innovations which does not discourage them but instead motivates them. The Innovation Management team is simply the catalyst that does the initial exploration and validation and it most certainly does not preclude PMs from being innovative themselves. In fact, the opposite is the case: the Innovation Management team fosters innovation in the company and all stakeholders do benefit from that. In conclusion, both PMs and IMs will be innovative, the difference is that the PM will innovate more on the features of a previously validated product for which a smaller amount of time is sufficient, whereas the IM will innovate on products spawning new business opportunities that may or may not work in the market. Due to this difference in scale, the probability of failure is higher for an IM than it is for a PM. An innovative feature that is not accepted in the market will not render your existing product or its business opportunity useless, but a failed MVP will not bring the new business opportunity at all. It is important for an IM to not get discouraged by failures and it may be harder for people to deal with failure if they happen on a product-level instead of a feature-level.
In conclusion, innovations can only happen if the people who are responsible for them are given the necessary focus time. That is why in this post, the titles of IM and PM were used to make it clear what the difference in each role is. However, it should not be assumed that IMs and PMs require entirely different backgrounds. The key differentiator is the time needed to focus on what is important for the specific role as explained above. People acting as IMs should be freed from the business as usual responsibility or else the required time for innovation is drained. I truly believe that a PM can act as an IM in the same way that an IM can act as a PM. Still, you need to acknowledge the fact that working as an IM requires you to be comfortable with the higher risk that this role entails. While the probability for failure is higher for an IM, so is the potential reward for the company if the innovation turns out to be successful and, therefore, an Innovation Management team can be a feasible investment despite its cost.