Secrets of True Innovation
26 Mar 2007|Leigh Marinner
The AMA’s Marketing News has a cover story on innovation in the February 1, 2007 issue. This point of view is upheld by what we have discovered in our client work. Line extensions do not lead to real innovation. True innovation means designing a product that delivers significant new value to the customer. And success is first and foremost a function of senior management, not just R&D and Marketing. The culture has to embrace innovation and what comes with it – risk, uncertainty and failure. A few of our observations about successful innovation:
1) Being afraid to fail and not embracing risk stifles innovation. You need to be willing to go in the wrong direction in order to be open to true innovation as opposed to product extensions
2) Stage-gate processes need to be modified to allow true innovation to flourish. You can’t come up with reliable numbers that will pass the stage-gate process early in a true innovation process. Stage-gate processes push products into an existing mold. While it’s important to have some method to make rational go/no go decisions before too much is invested, a company needs to be willing to pursue questionable ideas for some time in order to be able to show potential if it exists. Truly new ideas often look wacky at first.
3) Often truly new ideas come from outside a company, not just from the R&D facility. Companies that manage to avoid an NIH mentality have an advantage.
4) True innovation need not be based just on core product innovation. Starbucks has shown that consumers’ emotional experience can create innovation. Orange Glo showed that a customer’s experience with a cleaning product can create a truly innovative experience, even though the underlying cleaning technology isn’t new. Although the Prius represents new technology, the reason it is so successful is due to emotional considerations – a substantial consumer segment care enough about being (and being seen as) environmentally conscious to make that a primary purchase criterion for their car.