Innovate Your Business Processes to Align with Innovation

By Delony Langer-Anderson
New Product Development Specialist
3M Consumer Healthcare



Creating truly new products and services inside a corporation with a well-defined product development process can be a tough challenge for any team. Communicating progress during the turbulent front end of the innovation cycle is a critical and difficult requirement that often frustrates even the most experienced leaders.

However, champions for innovation can support their teams and communicate progress up the chain in a way that satisfies other's natural curiosity and need for details. As Delony Langer-Anderson explained during her presentation at this year’s 8th Annual Innovation in New Product Development and Marketing: A Frost & Sullivan Executive MindXchange, this type of communication simply requires planning and practice.

Successful innovation requires having the right people in place, Langer-Anderson said, as well as the right leaders to help those people succeed.

Innovation starts with chaos, but the right people will bring it to order from the so-called “fuzzy front end” to practical and applicable innovations. Talented innovators excel at turning the abstract into something concrete.

Qualities of Successful Innovators

What do those innovators have in common? Langer-Anderson listed these key qualities:

• They have a strong ego
• They take risks others won’t
• They have good communication skills
• They’re fed by the drive to discover
• They thrive when working on a wide variety of tasks
• They feel that work should be enjoyable
• They see possibilities not only in the present but in the future

Having the right attitude on the part of leader is also key, Langer-Anderson said. Leaders need to make their team members feel like they can be creative and innovative and take risks. It’s critical to create an atmosphere where people can fail without consequence so they no longer fear failure.

People need a creative space in order to be creative. That starts with leadership. This innovation process can be chaotic at first but it can be honed down into something more concrete. That’s how innovation is driven, Langer-Anderson said – encouragement, positivity, and the right questions can make the team more productive and more innovative.

Communicating for Innovation

The language and communication styles leaders use during the innovation process go a long way toward creating the ideal innovation culture. These are the keys to keep in mind, according to Langer-Anderson:

• Use powerful and emotive adjectives
• Encourage thinking about the big picture
• Give continual updates so the team knows it’s making progress
• Encourage creative innovation
• Allow for negotiation and disagreement
• Acknowledge and recognize flashes of creative brilliance
• Allow for mistakes

On the flip side, these are some of the mistakes to avoid:

• Being obscure and obtuse
• Letting imaginations run wild
• Ignoring creative thinking
• Imposing final judgments on views
• Restricting the ability to take action
• Isolating or disregarding others’ involvement, and
• Being abrasive.

Leaders must also avoid passing negativity onto employees, Langer-Anderson said – one bad day for a leader can lead to a bad week for everyone else.

It’s important to find creative ways of recognizing and encouraging employees, rather using the word “good” over and over again. Managers need to use varied language, Langer-Anderson said, listing several synonyms to use in place of “good”: neat, nice, exciting, platform building, smashing, brilliant, strategic, acceptable, terrific, fabulous, category changing, excellent, novel, ground breaking, unique, interesting, wonderful, competitive, and ownable.

Leaders must also make sure their asking the right questions, such as:

• What did you learn?
• What worries you?
• Do you need help?
• What can you show me?
• What are you most excited about?

Those questions will help get people thinking more about the project and move more toward the concrete from the abstract.

Final Thought

Language is key, attitude is important, and the mindset of a team and its leader are critical to coming up with the next big idea. When managing creative front-end teams, organizations can optimize interactions by using the right communication techniques, with varied language, open-ended questions, and strategies broken down into palatable bites in order to encourage creativity during the innovation process.

Infographic: Challenges for New Product Development

By Jillian Walker
Research Analyst
Growth Team Membership™ 
Frost & Sullivan


Frost & Sullivan's Growth Team Membership™ (GTM) recently completed its 2014 survey of R&D/innovation executives. The executives were asked to identify their most pressing challenges for 2014. GTM will focus its best practices research to address the prominent issues identified in the survey.

This year's survey confirmed that portfolio management remains a top issue for R&D executives. Identifying breakthrough concepts, aligning R&D and corporate strategy, and prioritizing opportunities rounded out the top three of this year's challenges. Most respondents also indicated that process issues are preventing them from achieving their desired level of success.

If you have questions regarding the survey, or are interested in learning more about GTM’s R&D/innovation and product development best practices, please contact us at: GTMResearch@frost.com, follow us on Twitter @Frost_GTM, or visit us at www.gtm.frost.com

Why Innovation Management Matters to Product Development Professionals

By Doug Williams

Chief Research Officer

Innovation Excellence

New product development (NPD) professionals are tasked with two primary jobs: develop new ideas into products, and commercialize those products. NPD pros exist in nearly every business, but it’s a career where failure is commonplace. Although it varies considerably by industry and by company, the generally accepted metric is that 80% of new products fail in Year 1. I’ve also heard anecdotally that another 80% fail in Year 2. If you do the math, that means that only 4 out of 100 new products achieve commercial success.

The scariest part about those estimates is that all 100 of those products were believed to be winners by NPD pros prior to launch. NPD pros already turned their backs on the “bad” ideas that didn’t warrant advancement into the product development process. So what’s going on here? Why do so many of these “good” products fail? Is there something wrong with the new product development process?

“Garbage in, Garbage Out”

There’s no single magic answer to that question. Maybe your NPD process is flawed, or maybe it works exactly as designed. Or maybe, just maybe, you are feeding the wrong ideas into the NPD engine. Think about it: if you are starting off with bad product ideas, some of those will get kicked out of the NPD process along the way, but the ones that make it through to the end are still going to be bad products – which contributes to market failure.

What if more emphasis – or a more disciplined approach – was placed on the development of those new ideas? Wouldn’t a better method for identifying and vetting new product ideas likely result in an improvement on that 4% new product success rate – and isn’t that what really counts?

Innovation management creates a better vetting process for new product ideas

That’s where innovation management comes into play. It’s more than just new product development: Innovation management means that the company:

·         Identifies the business intent behind innovation;

·         Understands the opportunities and insights within the industry;

·         Identifies the spaces within which to innovate (current markets, adjacent markets, or new markets);

·         Builds robust business concepts and growth platforms instead of fragmented ideas; and

·         Turns concepts into business cases with winnable and sustainable business models.

Yes, there is some overlap towards the end of the innovation management process with the new product development process. But what’s different is the upfront investment in time and resources to develop a strong understanding of what kinds of products, services, or experiences are a good fit with respect to both the company’s goals and capabilities and the customers’ needs.

Innovation is now a business discipline that can be taught and learned

Business leaders around the world recognize business innovation as a main driver of new growth and success. However, few professionals possess the knowledge, skills, and tools around innovation, because in the past there had been no common standard or method for learning innovation and how to apply it in a business setting. The Global Innovation Management Institute (GIMI) aims to change all of that by creating and driving standards for innovation management through its Global Innovation Certification program.

Innovation Excellence (IX), the Center for Innovation, Excellence, and Leadership (IXL Center), and GIMI have partnered to bring the Global Innovation Certification program to market. The program was developed by a group of senior executives, innovation experts, trainers, academics, and consultants from around the world, with a goal of helping individuals, companies, and regions develop world-class innovation and innovation management capabilities through global standards, testing, protocols, and certification. The four-level program, which officially launched earlier this year, combines theory with project-based action learning, thus requiring participants to apply what they have learned.  

When it comes to developing new products, low success rates are normal – but that doesn’t mean they are acceptable. NPD professionals should explore innovation certification (either individually or more broadly within the organization) as a way to build an innovation management capability that will develop better new product ideas and, ultimately, increase new product success rates.

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Invitation to the Pain of Innovating

By Randall S. Wright
Senior Liaison Officer 
MIT


I sat in Legal Sea Foods in Kendall Square just on the edge of the MIT campus listening to Bill tell me about his company’s latest open innovation needs list. I’ve known Bill a long time — he’s one of his company’s top executives. After showing me the list, I remarked, “Bill, I hope you won’t mind my saying this, but I don’t see anything too ambitious. May I have a copy?” Bill replied, “No, I can’t give you a copy.” “Confidential?” I asked. “No,” he said, “You’re right. There’s nothing ambitious about it at all. I can’t give you a copy because it’s an embarrassment—this is all my company could come up with.”

This exchange brought to my mind words of the renowned Mortimer Adler, Professor of Philosophy at the University of Chicago: “Whoever passes by what is over his head condemns his head to its present low altitude.” This was Bill’s company’s problem. Or, rather, this was the problem with Bill’s fellow executives—none was willing to learn anything over his head. If they had had that willingness, then they would have created different list — an ambitious one.

These words of Professor Adler are from his famous 1947 essay Invitation to the Pain of Learning. There he confronted the notion that learning can be made to be fun. He countered that not only is learning not fun, it is painful. That’s because to learn we have to think, and according to Adler, thinking is downright painful: “Anyone who has done any thinking, even a little bit, knows that it is painful. It is hard work—in fact the very hardest that human beings are ever called upon to do. It is fatiguing, not refreshing. If allowed to follow the path of least resistance, no one would ever think.”

Few would argue with the proposition that to innovate means having to learn something new. But, this learning is not the sort that comes with short courses or executive education. Instead, it’s the learning that comes only by experiment, learning by building and doing, what MIT calls: “Mens et Manus” — Mind and Hand. We don’t have to look far: Archimedes, Leonardo da Vinci, Tycho Brahe, Charles Goodyear, Alexander Graham Bell, Thomas Edison, Henry Ford, Pablo Picasso, Ernest Hemmingway, Robert Noyce and Jack Kilby, John Lennon, Steve Jobs, Robert Langer...to see that innovation has come about only from learning by doing.

Professor Adler remarked that some think learning is something that can be added externally to a person, like buying a suit of clothes, where the buyer is cajoled into standing there willingly as he is fitted according to his own likes and dislikes and according to his own notions of what enhances his appearance.

But, Adler said real learning is nothing of the kind. For him, learning is the interior transformation of a person’s mind and character — and this requires unrelenting activity from the learner in the form of thinking. He continued: “Without thinking, the kind of learning which transforms a mind, gives it new insights, enlightens it, deepens understanding, elevates the spirit simply cannot occur.”

How many open innovation initiatives are really just caving-in to the path of least resistance — turning what should be an exercise in learning into an exercise in procurement? How many are really scavenger hunts, or shopping for a new “suit of clothes”, with wish lists of self-absorbed and self-serving incremental problems, or unsophisticated notions of breakthroughs — what the buyer thinks “looks good” — and not quests to learn and discover what is, as yet, unknown, but history shows always serves as the basis for new product and service platforms, and entirely new industries? How many open innovation websites are little more than “letters to Santa Claus”, posted in the hope that “magic elves”, this time living in the cloud instead of at the North Pole, will transform lists of transient wants into gifts of profit to be found waiting at the bottom of an income statement like presents at the bottom of a Christmas tree?

If a wireless device company had negotiated the plans, prototypes, and patents of the iPhone away from Apple, there is no doubt they could have manufactured and sold the very first ones. But, could they have gone on to invent the 2G, 3G, 4, and 5, to say nothing of the iPad? It is doubtful they could without first learning what Apple learned by developing the iPhone.

Professor Alder said: “’Education’ all wrapped up in attractive tissue is the gold brick that is being sold in America today on every street corner. Everyone is selling it, everyone is buying it, but no one is giving or getting the real thing because the real thing is always hard to give or get.” For executives of today, might we substitute “Innovation” for “Education”?

Taking the wisdom of Professor Adler’s Invitation to the Pain of Learning into the context of innovation: Unless we acknowledge that every invitation to innovate can promise profit only as the result of pain, can offer achievement only at the expense of work, all of our invitations to innovate, in labs or user groups, whether through ideation sessions or the Internet, will be as much bunkum as the worst late night television advertising, or a campaign pledge to increase benefits while cutting the deficit and taxes at the same time.

About the Author

Randall S. Wright is a Senior Liaison Officer with MIT's Industrial Liaison Program. He manages the interface between the managements of companies, headquartered in the United States and Europe, and the senior administration and faculty of MIT. Prior to becoming a Senior Liaison Officer for MIT, Randall was a Marketing Manager for Pfizer, Inc., and a Strategic Planning Analyst for Pennzoil Company. Randall is an invited lecturer at Northeastern University's Executive M.B.A. Program where he lectures on innovation and corporate strategy.

Book Review: Big Bang Disruption: Strategy in the Age of Devastating Innovation

Authors:
Larry Downes, Author and Internet Industry Analyst
Paul Nunes, Global Managing Director of Research, Accenture Institute of High Performance

Reviewed by Sam Narisi

We have entered a new age of innovation, one that presents opportunities for businesses along with significant challenges for established enterprises.

As Larry Downes and Paul Nunes describe in their book, Big Bang Disruption: Strategy in the Age of Devastating Innovation, the innovation timeline has shrunk. Whereas it used to take years or even decades for innovations to come along and disrupt markets, those changes can now happen practically overnight. Any stable business can be devastated in a matter of months or days by new competition, often from tiny start-ups with minimal capital, thanks to the declining costs of creation, information, and experimentation.

Some of the examples of Big Bang Disruptions cited by Downes and Nunes include:

• Google Maps – The day that Google announced its Google Maps Navigation service, the share price for traditional GPS devices dropped by 15%.
• Amazon Kindle – By waiting until the right moment to launch the Kindle e-reader, Amazon ushered in a trend in which sales of e-books are exceeding sales of traditional books by an increasingly wide margin.
• MakerBot’s 3D Printers – Though not the first manufacturer of 3D printers, MakerBot has innovated by creating a free platform that allows users to collaborate with each other and share designs and expertise.
• Uber – Despite the burdensome regulations surrounding the taxi and limousine industry, Uber’s ridesharing service caught on extremely quickly thanks in part to the fanatical devotion of its early users.

In order to stay relevant as disruptions such as those appear more and more often, companies need to change how they do business. That’s the lesson from learned from brands like Blockbuster, Blackbery and others that have been devastated by Big Bang Disruptions.

Surviving in the age of Big Bang Disruption requires companies embrace a radical new approach to business strategy, Downes and Nunes argue. All companies need to reinvent themselves as innovators that can anticipate changes and quickly adapt.

In their book, Downes and Nunes share the secrets of success learned through research from the Accenture Institute for High Performance, at which Nunes is the Global Managing Director of Research, and interviews entreprenuers, investors, and executives from more than 30 industries. They lay out a plan for action and describe how companies such as Philips, Citibank, Fujifilm, and Texas Instruments have embraced the new innovation model.

Key steps for adopting that new model include:

• Find curious, focused individuals who can make sense of the hazy future of technology and strategy.
• Engage actual customers using low-risk market experiments.
• Capture winner-take-all markets by fulfilling all of that market’s needs.
• Anticipate saturation and get out of market before the value drops, shed assets before they become liabilities, and avoid sustaining products that are no longer viable.

As Downes and Nunes show, every industry is affected by these trends and the situation is only becoming more challenging as disruptive innovations come faster and faster. The good news is that any company can master the innovation strategy of today’s start-ups, and, in their book, Downes and Nunes offer a practical roadmap for which to do so.

Big Bang Disruption: Strategy in the Age of Devastating Innovation by Larry Downes and Paul Nunes, Portfolio (272p.), ISBN 978-1591846901

‘Activation’: The Next Step in Customer-Centricity

By David Brousell

Global Vice President, Research, and Editorial Director

Manufacturing Leadership Community| Frost & Sullivan

Putting the customer at the center of your business model may sound like an obvious thing to do. After all, what sort of business would you have without customers? But the idea of customer-centricity goes way beyond being responsive to customer demand, achieving higher customer satisfaction ratings, getting a product delivered on time, or focus-group testing a new product.

To hear C-suite executives describe the challenge of becoming truly customer-centric, the full embrace of the idea is nothing short of a revolution in how executives and their organizations think, behave, and act. And it is a revolution in which they must take up arms, so to speak, if they are to avoid being overwhelmed by the disruptions of advanced technologies and the dramatically changing balance of power with customers.

A new study of attitudes in the C suite by IBM underscores both the opportunities and challenges facing organizations in their adoption of customer-centric business models. The study, called the “Customer-activated Enterprise”, encompassed face-to-face interviews with more than 4,000 C-suite executives across 20 industries in 70 countries. The basic conclusion: Conventional structures have broken down, power has shifted to the individual consumer, and organizations that don’t fundamentally re-think their business models risk being left behind.

“In two-thirds of the organizations that outperform their peers, leaders are not just managing customer experiences; they are reorienting their organizations, strategies, and investments to cultivate contemporary relationships across all manner of customer interactions,” said Virginia M. Rometty, IBM chairman, president, and chief executive officer, in a statement in the report. “In brief, leaders’ priorities are shifting from intra-enterprise efficiency and productivity to a new agenda led by the front office and focused on extra-enterprise engagement, transparency, collaboration and dialogue with audiences and all the individuals within them.”

[A report by the Manufacturing Leadership Council, issued in the fall of last year, called Leadership: The New Struggle for Customer-Centricity, came to many of the same conclusions about the changing shape of customer-centricity.]

Over the next three to five years, CXO participants in the study said they anticipate major shifts in how innovation is conducted, in how organizations value and interact with customers, and in how their own organizations are structured and run. Sixty-eight percent of the participants, for example, said they expect that customer interaction will be digitally or socially based, compared with face-to-face interaction. Fifty-four percent said they expect a focus on customers as individuals, as opposed to treating customers as a category or a market segment. And 52% said they expected their companies to exhibit “organizational openness” rather than being primarily focused on operational control.

In its analysis of attitudes about customer-centricity, IBM said that three major themes emerged:

• opening up to customer influences
• pioneering digital-physical innovation, and
• crafting engaging customer experiences.

Under customer influence, IBM said the study revealed that a growing number of CEOs believe that customer influence should not be confined to traditional activities such as new products or services. Now, customers should be involved in helping develop business strategy, IBM said, but the challenges in doing so are considerable.

“Accepting customers as stakeholders in determining an enterprise’s future has huge cultural and organizational implications,” the report said. “These businesses can’t just be customer-centric. They must be customer-activated. That requires creating fully reciprocal relationships with customers. It means being ready —and willing — to change course to pursue those paths that create mutual value. And it requires finding ways to include customers in key decisions.”

The real action in innovation, the report said, is at the intersection of the digital and physical worlds. A strong majority of CXO participants in the study, 60%, said they are looking to partners to help create business value, with almost half saying they are sourcing innovation from outside the company. But here, too, are formidable challenges.

“Two-thirds of enterprises have a weak digital-physical strategy — or none at all,” the report states. “Some organizations are reconfiguring their offerings to capitalize on social networks and mobile connectivity. Others are reshaping their operating models to inject customer input into every aspect of the buying and selling chain. But they’re often not doing both at once.”

Nearly seven in 10 CEOs, the study went on to say, recognize the “imperative” to embrace the social/digital intersection. And over half of the CEOs said they must understand and engage customers not as categories or market segments, but as distinct individuals.

“The members of the C-suite collectively need to step outside their comfort zone to create new and engaging customer experiences,” the report said. “Their real challenge: can they collaborate to make this happen?”

That, of course, requires C-suite executives to change their behavior, which is no easy task. But the fact of the matter is that behaviors of all sorts are changing as we speak. Some will be progressive and some will be regressive, as we are currently witnessing in Eastern Europe. But the old rule will still apply: The strongest today will not necessarily survive tomorrow. The most adaptable will capture the field.

To access the IBM report, vist http://www-935.ibm.com/services/us/en/c-suite/csuitestudy2013/

H.E. Salma Hareb get Frost & Sullivan's 2014 Growth, Innovation and Lead...