This edition of the Agile Innovating ^TM Newsletter is for Entrepreneurs and Business Leaders who want to improve their Innovation development decisions.

Every solution experiences 4 correlated life cycles related to market growth, applied technology and solution architecture, technology adoption, and customer adoption dynamics.  Tension in innovation decision making comes about when trying to decide whether an existing solution should be improved, or a new solution invented and introduced.  Being able to accurately diagnose the current stage, and what changes to anticipate in the next stage, in each of the four life cycles is an important skill in innovation driven product management.

This article describes the four life cycles and provides some insight into how to diagnose the current stage information to improve innovation decision-making.

There are four life cycles that every solution experiences as it moves from introduction into growth, harvesting, and finally, end-of life.  These life cycles are :

Each life cycle is characterized by an “S” curve.  The shape of the curve is common, but the duration and slope of the curve representing the sequential stages of the particular life cycle are distinct for each solution and market.

Market Life Cycle

The Market Life Cycle tracks the growth of Total Sales over Time.  Sales growth progresses through three stages:

1. Increasing the number of customers
   Increasing the number of customers, early in the life cycle, depends upon aligning the solution specification with the Voice of the Job.  The challenge is to differentiate your solution based upon job performance.
2. Increasing sales revenue
   Increasing sales revenues, during the mid-point of the life cycle, depends upon aligning the evolving solution specification with the Voice of the Customer.  The challenge is to differentiate your solution based upon improving the customer experience.  
3. Decreasing costs
   Decreasing solution costs, late in the life cycle, depends upon focusing the solution specification based upon the Voice of the Stakeholder.   The challenge is to differentiate business performance by reducing solution costs to maintain profitability while sales decline.

Applied Technology and Solution Architecture Life Cycle

Solutions are an integration of a problem solving idea with an enabling technology to create User, Business, and Market Value.  Early life cycle solutions differentiate on applied technology.  The solution architecture (e.g. how the solution is “put together”) is constrained by the technology applied.  

As the solution matures, User, Business, and Market forces cause a convergence to a dominant technology and solution architecture.  This convergence process shifts the basis of Competition from technology and architecture to feature differentiation, cost, availability, and outcomes based upon modularity and standard processes.   

Technology Adoption Life Cycle

Technology Adoption Dynamics influences customer buying behavior, requiring life cycle stage-specific sales skills.

Early stage customers are buying technology and a particular solution architecture.  The skill that drives growth in customers is consulting, helping customers understand how to get the most out of the technology based solution in their situation.  

Growth stage customers are buying applications.  The ability to provide customized solutions and technical support is the differentiating skill that drives revenues during this stage.

Plateau stage customers are buying integrations.  Standardized solutions, along with high quality service support, drive continuing sales as the Market converges on dominant solutions.

Late stage customers are buying standard products.  Solution Modularity and Performance vs. Price become the differentiating factors.  

Customer Adoption Life Cycle

Customer Diffusion Dynamics influences the rate of adoption of solutions.  

Early stage adoption is driven by solution novelty and performance.  The questions that early stage adopters ask are: (1) Is the solution possible?  (2) Does the solution work?

Adoption in later stages concern new solution utility and outcomes.  

The questions that early majority adopters ask are: (1) Is there evidence this new solution is better? (2) If I don’t adopt this new solution, will my business be left behind in the market?  

The questions that late majority adopters ask are: (1) Does competitive pressure make it necessary to adopt the new solution? (2) If I don’t adopt, will my business be left out of the market?

Diffusion and Rate of Adoption are two aspects of a social acceptance process that must be facilitated and verified.  Ensuring that the stage specific questions are affirmatively answered maximizes the potential of your solution through-out the Adoption Life Cycle.

Conclusion

Ignoring, or not being aware of, the life cycle dynamics of solutions is another contributing factor to innovations being the exception rather than the norm.  Making sense of the life cycle stage for your solution keeps your Innovation Program in-synch with the market, allowing you to anticipate the changes and rate-of-change your program needs to be organized around.  

Ensuring that your Invention and Introduction decisions are aligned with the stages in each of the four life cycle domains increases the probability of successful innovating.