Here at Products That Count, we don’t do anything half-way and March is a perfect representation of how much we love driving forward the product conversation and looking for ways to accelerate product innovation. First, we started the month off with an incredible virtual rendition of the Product Awards, where the winners only became more and more impressive as we announced them. If you weren’t able to join us, you can catch the entire event Rebroadcast right here.
Following the Product Awards, we wasted no time in launching into one of our biggest weeks of events of the year so far: a triple header of amazing presentations by leading product executives. We’ll start things off with a recap of our session with Royal Bank of Canada Sr. Product Director, Arun Milton, and the ways product managers can drive product innovation at large organizations.
On the Three Horizons framework
Starting off his talk, Arun states that product innovation can look different to people and companies depending on a number of factors. It’s up to product managers to learn how to recognize potential innovation opportunities within any set of circumstances.
“A couple of decades ago, McKinsey came up with the ‘three horizon frameworks”, a very useful framework to classify innovation. Horizon one represents innovation in your core products. These are the products around which the business is built and may have millions in client profitability.”
“On the other end of the spectrum is horizon three. These are not even product opportunities. These are ideas that can impact your business in the future. In financial services, as an example, horizon three might look like the impact of blockchain and cryptocurrency.”
“Spanning the center spectrum, you have horizon two, which is essentially innovation to meet the needs of new market segments, or radically changing your existing product or business model to meet the needs of other segment clients.”
On product innovation in Horizon Two
“No product leader wants to be the next case study for tech digital disruption”. Arun quickly gets to the heart of the matter, explaining why innovation within a core product space, while difficult, comes with the potential for great rewards.
“Horizon Two product innovation is an uncomfortable and costly space to innovate, but companies that cannot create new products will find it difficult to bring new ideas to fruition, even if they have great ideas in Horizon Three. That’s why Horizon Two innovation is important at an organization, and I believe product managers are best equipped to drive that type of innovation.”
“If you’re a senior leader and your focus is on increasing market share, you’re looking at the key results that are driving the right outcome for the business. But if you’re laser focused on the key results, you may be missing out on opportunities to innovate within the product. Is there a key area that you could be focusing on and you’re not? Or if you step back a little bit more, is there a new product opportunity that you could focus on to better achieve that business outcome? That’s where you have an opportunity to start to innovate.”
On getting buy-in with a product vision
So, you’ve dug into the core product space in horizon two, found opportunities for growth and product innovation, and are now ready with your product strategy and business use case. Now it’s time to get buy-in from the executive team and other stakeholders. This is the point where a clear product vision will come to your advantage.
“You may still not be answering the big question for your leaders, the big ‘so what’. From their perspective, they may already have products in the market that have met market fit that are profitable. This is where a product vision that really helps visualizing the product vision really helps.”
“The vision prototype is a futuristic view of your product. It’s a view of your product that shows the magnitude of your idea. Essentially, it’s the product fully realized, solving a gamut of pain points for your clients, and showcasing the value it can provide your business in the future.”
“The goal here is to communicate your product value to your leaders and stakeholders, to get them to understand why we need to focus on this today. The goal though, is not to aspire to build this prototype feature by feature. It’s essentially an inspiration tool to communicate product innovation.”
Watch the entire presentation above to catch further insights and frameworks that aid in driving product innovation. Then, head on over to our Events page and make sure to see what other product leaders are speaking this month at Products That Count.
About the speaker
Arun heads Product Management for Royal Bank of Canada’s Solution Acceleration and Innovation group where he leads a team of PMs that manage a portfolio of B2C and B2B products. He also heads RBC Launch, RBC’s innovation hub, where the focus is on rapidly experimenting and developing new products. In prior roles, Arun developed products for RBC's commercial lending business, building large-scale credit structuring applications. Arun has deep domain expertise in financial services gained working in corporate strategy and various business lines. Prior to banking, he has worked as a Management Consultant and as a Physician at different points in his career.