A healthy product company requires a culture, org structure, and collection of processes that are all carefully designed to foster innovation. It’s easy to get these things right when a company is small, but key mistakes made along the way can greatly affect its ability to innovate as it grows:

  • Siloing off innovation to outside consultants, small R&D teams, or single leaders
  • Taking prospect and customer feedback too literally
  • Hiring employees who look, act, and think homogeneously

Unfortunately, these missteps are common. Let’s break down why they’re bad, why they tend to occur, and what should be done instead:

Siloing off innovation to outside consultants, small R&D teams, or single leaders

Why it’s bad: Innovation requires deep discovery, collaboration, and creativity. When it’s siloed off, those ingredients are compromised. In the process, every creative employee in the company - regardless of role - is implicitly taught to believe that they are not to “waste” their time engaging in efforts to innovate.

Why it happens: As a company grows, it decides it has to make its most talented people increasingly more specialized and focused. It’s seemingly easiest and most sensible to do the same with innovation itself.

What to do instead: Lean in - uncompromisingly - to the notion that innovation is everybody’s job. This means actively encouraging the use of safe times and spaces where mission- and objective- driven solutions can be discussed and experimented with freely.

Taking prospect and customer feedback too literally

Why it’s bad: “If I had asked people what they wanted, they would have said faster horses.” This quote, often misattributed to Henry Ford, is true for every product company regardless of who popularized it. A company must understand its constituent’s problems, but if it’s taking their proposed solutions at face value, it’s disregarding its most valuable asset: the collective wisdom and creativity of the employees whose jobs it is to innovate and shape the market.

Why it happens: Sales teams have lots of sway over product that gets created. This isn’t a bad thing in and of itself, but when new deals, upsells, or renewals are on the line, it’s easy to cede to the wishes of prospects and customers to meet revenue goals. It also doesn’t help that there is a deeply rooted sentiment that the customer is always right.

What to do instead: Separate pain points from solutions. Prospects and customers aren’t trained in the art of product development. They tend to recommend hastily conceived solutions that only fix their problems - not the wider market’s. Instead, find creative ways to address problems with the product and features that already exist. Then, synthesize the wider community’s feedback and come up with fresh, innovative product - the kind that not only solves problems but outright delights people.

Hiring employees who look, act, and think homogeneously

Why it’s bad: A product company can’t create something novel and meaningful to a broader community if all of the people in it share the same perspective on that community and what is meaningful to it. Innovation requires perspective and perspective requires diversity.

Why it happens: Companies often try to hire for “culture”, but this ends up being used as an excuse for hiring employees with very similar political, racial, or socioeconomic backgrounds.

What to do instead: Society has come to understand that the act of governing, educating, etc, tends to work better when performed by a melting pot of collaborative professionals with the same mission. Innovating in a corporate environment is no different. Seek to hire folks who are noticeably different than existing employees yet still buy into the company’s mission. They’ll fit into the “culture” just fine as long as they’re willing to collaborate and compromise.