Scott Cook of Intuit on Product Innovation
In 1982, after Scott Cook and his wife were talking about the tedium of paying bills, he got the idea to create personal-finance software to automate that task. The next year, he founded Intuit, which has since produced many applications, including QuickBooks and TurboTax, that simplify accounting tasks. Intuit now has annual sales of $3.1 billion and employs about 7,800 people.
Q: How can I incubate new ideas while staying focused on day-to-day revenue generation?
This is the central operational challenge for most businesses. If you want to be great now and in the future, you have to learn to do these two things at once.
First of all, the key to maintaining focus on day-to-day results is making sure that employees know which output metric they are responsible for and how it is measured. With that knowledge, they can learn what drives these numbers up or down and work only on things that move the needle in the right direction.
When it comes to innovation, our theory is that you should enable a lot of your employees -- not just a small group -- to invent business ideas or product features. We encourage this by allowing our engineers and product managers in most of our divisions to devote 10 percent of their workweeks to new ideas. That's how we developed many of our products and features.
With this sort of ongoing innovation, it's important to run cheap, quick tests to make sure you are on the right track. For example, our payments group wanted to find a new way to help businesses pay each other. They had three theories about what customers wanted. Another department said that one of the three wasn't going to work. They could have argued the point for weeks, but instead, they let the customers vote through customer surveys. We quickly had our answer.
When you are developing ideas, remember to think big. For innovations to succeed, they must solve a large enough problem for the customer. In the 1990s, we created a product, Quicken Financial Planner, that helped customers create a financial plan to save for retirement or college. We quickly took 95 percent of the market share, but the category was tiny. We eventually killed the project.
The product manager, who was a very smart guy, said that we should have figured it out earlier, because when we looked for a focus group, we couldn't find enough people who had done a financial plan. We weren't solving a big enough problem.
Focus the organization on tackling big problems, and you will have a better shot at getting big results.