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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