In a discussion yesterday with senior leaders at a large consumer goods company, we discussed an important challenge facing managers who are trying to build new ventures or launch innovative new products in large organizations. Many managers face what I call the "moving the needle" fallacy. In many firms, senior executives will only endorse new ventures or products if they believe that they will "move the needle" in terms of top line revenue for the firm. In other words, they want the business to be big, not just a tiny increment to overall sales. They don't think small ventures are worth the time and effort.
What's the fallacy here? In my view, this requirement actually drives people to broaden the potential market for their innovative new product or service to the point where it becomes far too generic and similar to rivals' offerings. They essentially are pushing their managers to be less focused. Instead of tailoring a product to a very specific target market, managers end up trying to be all things to all people in search of a large enough target market to move the needle in terms of total firm revenue. In sum, to attract a broader range of customers, they offer a product that is far less distinctive. We get the opposite result from good strategy!