True Innovation – The Key to Success

By: Jennie Björk

“There are no quick fixes and no easy answers for succeeding at innovation” says Dr Robert Cooper, senior consultant to Fortune 500 firms and top scholar in the field of innovation management (PDMA) in an interview with InnovationManagement. “It’s back to basics – an aggressive innovation strategy that focuses your businesses’ R&D efforts; effective portfolio manage to pick tomorrow’s growth engines; a climate and culture that fosters innovation in your business; and a robust idea-to-launch system.”

The goal is true innovation – breakthrough new products, services and solutions – that create tomorrow’s growth engines. But most companies are stuck in traditional development: line extensions, modifications and improvements, which won’t generate the desired sales and profits. InnovationManagement asked Dr Robert Cooper about the importance of innovation.

Everybody is talking about innovation and how important it is. Do you agree – is it really that important, and why is that?

– Most companies have ambitious growth goals. The trouble is there are only so many sources of growth. Four of these – market growth, market share increases, new markets, and acquisitions – are proving difficult or expensive. Markets in many countries and industries are flat and increasingly commoditized; gains in market shares are expensive; and acquisitions often don’t work. New markets – India and China, for example – pose special problems. Even traditional product development – for most companies, this means line extensions, improvements and product modifications – seems depleted, and only serves to maintain market share.

The answer of course is true innovation – breakthrough products, services and solutions – that create growth engines for the future. Some examples, such as Apple’s IPod, are often cited. Note that Apple did not invent the MP3 player; nor was this opportunity a Blue Ocean; in fact there were 43 competitors when Apple launched! What Apple did was first to identify an attractive strategic arena (MP3s) where it could leverage its strengths to advantage; and then to develop solution that solved users’ problems: 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 – not as well known as the IPod – where the company created “big concepts” and bold innovations – typically an integrated system or total solution package for the customer – and won. 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.

What is ideation and why is it important? What does it mean for companies to work with ideation?

– Ideation is the first stage of the innovation process. In my Stage-Gate model, I call it the Discovery Stage. And Discovery means a variety of activities aimed at uncovering great new product ideas to feed your development pipeline. While many companies have implemented an effective idea-to-launch system, we find too often that the “cupboard is bare” – there is a real shortage of superb ideas and blockbuster projects. And no matter how good your execution, if the idea is weak or boring to start with, don’t expect miracles.

Ideation or Discovery encompasses a wide variety of activities. Our research shows that voice-of-the-customer research is a very productive and effective source of major ideas and “big concepts”. Here the goal is to uncover the customer’s or user’s unspoken and unmet needs, to understand their problems and “points of pain”, and to conceive winning solutions. Ethnography, lead user analysis, and depth visitation programs are effective here. But there are many other ideation methods – strategic approaches, technology developments, internal ideation – which are effective as well and are outlined in my recent book.

What would you say is the hottest trend in the field of innovation management today and why is that?

– Very difficult to say. We’ve seen a lot of “hot concepts” come and then fade out recently – like the flavor of the month. A few years ago, it was Open Innovation and user-focused innovation. But, except for a few limited success stories in a few industries, widespread successes and adoption have been limited. Similarly, Blue Ocean was introduced in the late 90s with great fanfare. But as business leaders have found, Blue Ocean is a great theory to explain past successes, but difficult to do; the same with “exploiting disruptive technologies”, another great theory. Thus, examples of firms using these methods today and profiting by them are few and far between.

My advice is this: There are no quick fixes and no easy answers for succeeding at product innovation. Fads and “hot topics” come and go, but in the long run, it’s back to basics.

Which then are the “basics” – the most important factors to create a successful and innovative organization?

– Our research finds four major themes distinguish top performing innovation companies from the rest:

• Having a clearly defined and communicated product innovation and technology strategy for your business – in particular, one that defines the key strategic arenas where the business can focus its ideation and its R&D efforts in order to create growth engines – the hunt for “big concepts”.

• Making the right investment decisions, namely portfolio management. That is, allocating the business’s resources to the right strategic arenas and to the right types of projects, and making effective Go/Kill decisions on individual development projects.

• Having a robust, streamlined idea-to-launch system – an up-to-date process for driving your development projects to market, quickly and effectively (something like NexGen Stage-Gate).

• Having the right climate, culture, organization (team-based) and leadership for innovation – the people side, which is perhaps the most difficult to achieve.

None of these themes should come as a surprise to leaders in innovation. The trouble is that very few companies have achieved all four. So my recommendation is to work on the basics: do what Procter & Gamble has done with their “innovation diamond”.

Questions by Jennie Björk

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Endnotes

[1] PDMA – Product Development Management Association. http://www.pdma.org/

[2] Book: R.G. Cooper & S.J. Edgett, Generating Breakthrough New Product Ideas: Feeding the Innovation Funnel, Product Development Institute Inc.,  2007. www.stage-gate.com

[3] Cooper, R.G. & M. Mills, “Succeeding at new products the P&G way: A key element is using the “Innovation Diamond”, PDMA Visions, XXIX, 4, October 2005, pp 9-13.

[4] These four themes have the topics of Cooper seminars at CHAMPS (Chalmers Advanced Management Programs) in Göteborg. This May 2010, the topics of the two-day CHAMPS event are: “Developing a product innovation strategy for your business”, and “effective portfolio management (project investment decisions)”. See: www.champs.se

[5] For seminar on “Innovation in Flat Markets”, see www.u3.dk