The Challenge
 |
| Stage-Gate Benchmarker TM
Evaluate your product innovation program for the critical elements of successful
performance:
- Innovation Strategy
- Idea-To-Launch Process
- Portfolio Management
- Leadership and Quality Execution.
The analysis covers 114 critical variables including: the Innovation Diamond™,
Ideation, resource allocation, metrics and project execution. |
|
 |
|
|
Most companies have ambitious growth goals. The trouble is there are only so many sources
of market growth. Markets in many countries and industries are flat and increasingly commoditized;
achieving growth in market share is expensive; and acquisitions often do not work. For
most companies, product development means line extensions, improvements and product modifications
and only serves to maintain market share. Markets aren’t growing, so firms increasingly
compete for a piece of a shrinking pie by introducing one insignificant new product after
another. The launch of a truly differentiated new product in mature markets is rare these
days.
The Solution
The answer is true innovation – breakthrough products, services and solutions – that
create growth engines for the future. This means larger-scope and more systems-oriented solutions
and service packages. Examples such as Apple’s iPod, are often cited. (Note that Apple
did not invent the MP3 player; nor was this opportunity in a Blue Ocean; in fact there were
43 competitors when Apple launched!) What Apple did succeed in was in identifying an attractive
strategic arena (MP3s) where it could leverage it strengths to its advantage and then to
develop a solution that solved users’ problems. The result - an easy-to-use, easy-to-download
MP3 system, which also happened to be “cool”.
There are dozens of other similar examples of true innovation where companies created “big
concepts” and bold innovations, typically an integrated system or total
solution package for the customer, and won:
P&G’s Olay skin-care business: Once almost given up on by P&G, the business
was rejuvenated based on the “one big concept” - preventing the signs of aging
on women’s faces. The company searched for and found the needed technology (outside
of P&G) and relaunched the business with multiple new products: Regenerist, Definity,
Professional, and others. Olay now does over $2 billion in sales annually.
Barnes & Noble, U.S. bookseller: Barnes & Noble, the huge U.S book retailer, operates
hundreds of bookstores across America. Facing new on-line competition, the company has boldly
launched a reading system called Nook. One can download books from B&N’s huge library
and do so wirelessly (anywhere in the U.S. and Canada, on the fly, direct to the tablet,
and with no need for a computer).
Sanifair in Germany: The company developed a systems solution to a problem we all face when
travelling on the highway – finding a clean and well-equipped restroom. The company
developed and operates a chain of public toilets that are clean, open and modern, especially
at service centers along highways. They charge per use, but the user gets a voucher for the
shop in the service center, thus up-selling the rest-room user to spend more in the service
center.
Green Mountain Coffee Roasters: The company began humbly as a small café in rural
Vermont in 1981, and soon was doing its own coffee roasting and selling to local hotels and
restaurants. Management saw a unique consumer need and developed an inexpensive and convenient
single-serving coffee-maker for households. Green Mountain created the K-Cup and Keurig system
and signed up well-known coffee makers (Tully’s in Seattle, Newman’s Own, Timothy’s
in Canada, and others). The business model was similar to Gillette’s razor-and-blade
model, namely sell the machine cheaply and make money on the K-cups. The company has been
enormously successful, achieving 2009 sales of $800 million, and has been able to win against
corporate giants like Kraft and Nestle.
There is a pattern here: this is the type of innovation that we need, and this is what will
generate the growth desired by so many firms.
Five Innovation Vectors
Our benchmarking studies of hundreds of firms reveals that five vectors must be in place
to undertake this type of innovation to yield bolder and imaginative projects that create
integrated, larger and more systems-oriented solutions and product-service packages.
 Develop a bold innovation strategy that focuses your business on the right strategic
arenas that promise real growth.1
Most businesses focus their efforts in the wrong areas – on flat markets, mature
technologies and tired product categories. Break out of this box towards more promising
strategic arenas with extreme opportunities.
- Foster a climate and culture that promotes bolder innovation.
Leadership is vital to success. But if senior management does not have the appetite for these
big concepts, then all your initiatives and systems will fail. Senior management plays
a vital role here in promoting an innovative climate in your business.
- Create ‘big ideas’ for integrated product-service solutions.2
We have identified the ‘top ten methods’ for generating breakthrough new product
ideas. Use them! Order a copy of Generating
Breakthrough New Product Ideas today!
- Drive these ‘big concepts’ to market quickly via a Stage-Gate® process
designed for major service-and-product innovations.
Just because these projects are imaginative and bold is no reason to throw discipline out
the window. In fact, quite the reverse is true. Adopt and use an efficient and effective
Discovery-to-Launch process that drives these large and bold projects to market.
- Build a solid business case and pick the winners.
Most innovation teams we see don’t get the facts and build weak business cases; the
result is that many worthwhile innovations don’t get the support they need to be commercialized.
It’s essential to do the front-end homework, and so build a compelling business case.
Then make the right investment decisions – evaluating ‘big concepts’ for
development when little information is available. Note that financial models don’t
work well when it comes to evaluating major innovations, because the data are often wrong.
But other methods can be used to make these tough Go/Kill decisions.3
So if you are looking to create game-changing new products for your company then consider
how you fare on the five innovation vectors. Each vector strongly impacts success and if
you truly desire this type of innovation then all five need to be effectively deployed within
your organization. Now might be a good time to critically assess whether your company is
ready for the challenge.
Back
to the Newsletter
About the Author
Dr. Robert G. Cooper is one of the most influential innovation thought leaders in the business
world today. He pioneered the original research that led to many groundbreaking discoveries
including the Stage-Gate® Idea-to-Launch process. Now implemented by almost
80% of North American companies, it is considered to be one of the most important discoveries
in the field of innovation management. He has spent more than 30 years studying the practices
and pitfalls of 3,000+ new product projects in thousands of companies and has assembled
the world’s most comprehensive research on the topic. His presentations and practical consulting
advice have been widely applauded by corporate and business event audiences throughout
the world making him one of the most sought-after speakers.
A prolific author, he has published more than 90 academic articles and seven books, including
the best selling ‘Winning at New Products, 3rd Edition’.
He is the recipient of numerous prestigious awards including the Crawford Fellow from the Product Development
and Management Association (PDMA) and the Maurice Holland Award from the Industrial Research Institute
(IRI). Dr. Cooper is a Professor of Marketing and Technology Management at the Michael G. DeGroote School
of Business at McMaster University in Ontario, Canada and Distinguished Fellow at the Institute for the
Study of Business Markets (ISBM) at Penn State University in Pennsylvania, USA.
|
