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Product managers face a continuous struggle between two opposing forces: innovation and execution. On the one hand, innovation creates differentiation, builds customer loyalty, and opens up new markets. On the other hand, execution makes sure that visionary ideas are delivered on time and within the scope without blowing the budget. Finding the right balance between these two forces is not only a functional necessity but also a key to long-term business success.
Many organisations make the common mistake of leaning more towards one side than the other. Those that focus on innovation but not execution produce half-baked, unsustainable products that never make it to the market. On the other hand, companies that focus only on execution may stagnate, producing what is possible rather than what is necessary. So, how can companies achieve innovation combined with disciplined execution?
This conflict between the creative and the practical is one that product leaders in every industry face. For instance, Steve Jobs’ Apple is one of the most innovative companies in the world. However, the miracle of Apple was not in the radical ideas, but in the ability to execute these ideas to the best of their ability. The original iPhone was not the first touchscreen phone, but it was the first smart phone to integrate software, design and usability in the best way.
On the other end of the spectrum is Google Glass, a product that was innovative but poorly executed. Google’s vision of the augmented reality glasses was noble, but the product had its flaws in terms of market strategy, privacy issues and lack of clear benefit to the user. The idea was great but the execution was premature and this led to the discontinuation of the product.
This balance or lack of it between innovation and execution is visible across various industries. According to a McKinsey study, companies with defined execution systems are 30% more likely to convert innovative ideas into market ready products. However, according to a PwC survey, although 61% of the CEOs considered innovation as a critical growth driver, only a few of them are confident that their companies can deliver on it. These statistics show that organizations know the importance of innovation, yet very few have learned how to implement it effectively.
Innovation cannot grow in an environment where ideas are shut down because of feasibility issues at the beginning of the process. However, businesses cannot afford to pursue every idea without a clear plan of how to bring it to life. The challenge lies in developing a system in which innovation is guided but not constricted such that it can still be creative.
Some of the most successful companies have integrated structured innovation into their culture. For instance, Amazon has a method called “working backward” where product teams write the press release of the product that does not even exist in the real world before developing it. This makes the teams state the value proposition of the innovation, to make innovation not just a tool but connected to real customer needs.
Agile is now the most common approach not only in software development but in almost all product development. However, it is used by Spotify to balance between innovation and execution through ‘squads’ – small, autonomous, cross-functional teams that build and iterate on products quickly. This kind of approach enables innovation to take place while at the same time, execution is decentralized and in tune with the overall business objectives.
However, not all companies are able to adopt Agile approach. This is even as Tesla, an electric vehicle manufacturer, is ranked among the most innovative companies yet it has had its share of execution challenges. It has experienced delays in production, supply chain problems and quality control issues. This means that while agility is key, it is important not to forget about other aspects of business, such as discipline.
Not all innovations are equally valuable. Kodak is one of the companies that failed to align innovation with business strategy. Although Kodak created the first digital camera, the company did not act on the digital photography concept quickly enough because it threatened the firm’s film business. On the other hand, Netflix succeeded in transitioning from sending out DVDs to streaming videos by aggressively implementing its innovation strategy, which involved risking the existence of the company’s current business model.
According to McKinsey, there is a thing called the two-speed approach to innovation:
Incremental Innovation (Short-Term): It entails the improvement of the current products and services as well as processes to enhance efficiency.
Radical Innovation (Long-Term): It is possible to explore the moonshot ideas, but all of them should be tested for feasibility.
This balance is something that cannot be seen in other organizations, but this is something that SpaceX does. While the company has a vision of sending humans to Mars, it gets these ambitions by doing incremental changes in the reusable rocket program. The Falcon 9 rocket, for instance, was created to decrease the cost of launch, which would make space travel profitable and support the long-term R&D.
Execution: The Achilles’ Heel of Innovation
Lack of execution discipline can easily undermine the best ideas. According to Harvard Business Review, 95% of employees are not fully clear on their company’s strategy, which results in misalignment of innovation efforts and execution. This gap is a key reason why many startups with great ideas fail to grow.
Execution demands partnership. Multidisciplinary teams that comprise members from engineering, marketing, finance, and operations guarantee that each product idea is assessed from different perspectives before resources are invested. For instance, Slack transformed from a gaming company to an enterprise communication platform through strong team alignment.
It is important to note that innovative companies fail because of poor project management. This means that effective execution is only possible if there are clear roadmaps with specific milestones, KPIs, and accountability. This is something that other companies like Microsoft have picked up and run with using OKRs (Objectives and Key Results) to ensure that every innovation effort is backed by measurable execution targets.
Failure is an inherent part of the execution process and it is something that should be encouraged. Toyota’s Lean Manufacturing concepts are based on the idea of removing waste and enhancing performance. Thus, Toyota has been able to maintain its position as one of the world’s leading automotive innovators while keeping operational costs low due to the company’s ability to identify and rectify execution failures early on.
At the center of this clash is leadership. Product managers, executives, and founders have to lead the charge on both creative thinking and disciplined execution. For instance, Google has a policy that allows its employees to work on their own projects for 20% of their working time; however, all such projects have to pass the feasibility check before being scaled up.
Those companies that manage to achieve this balance do not just launch new products, they create new industries. Apple’s transition from a hardware company to a services company with products like Apple Music and iCloud is a good example of how innovation can be combined with effective execution to create new revenue streams.
On the other hand, companies that do not balance these forces suffer from the “innovation trap”: either stuck in endless ideation with no products that meet market demand or implementing mediocre products that fail to meet market demand.
Innovation vs. execution is not a one-time decision; it is a process that continues over time. Companies that are able to excel at both are not just successful in the short term, they are building a foundation for long term success. Whether it is Apple’s design precision, Amazon’s customer obsession or SpaceX’s audacious yet methodical approach, the best organizations know that innovation without execution is just a dream.
For product managers and business leaders, the key takeaway is clear: