Creating Bold Innovation in Mature Markets
Five Vectors for Success
Authors: Cooper, Robert G.
Date: Third Quarter 2012
Tags: innovation, bold, breakthrough, portfolio management, strategic focus
For many firms operating in mature markets, there are only so many sources of growth open to them, which is why launching unique, superior products with a compelling value proposition is so vital. Yet company surveys show that bold innovation is down, while improvements and modifications to existing products are up. This only serves to maintain existing market share, rather than grow it. To succeed in bigger, bolder innovation, five vectors need to be in place: (I) having an innovation strategy that focuses your development efforts on opportunity-rich strategic arenas, much like Corning and Apple had; (II) fostering the right climate and culture for innovation, driven by senior executives, as found at Grundfos and 3M; (III) setting up a proactive idea generation, capture and handling system, as at Swarovski; (IV) having a next generation, idea-to-launch process designed to handle large, complex and bold development initiatives, as at HP; and finally, (V) using the right project selection methods, as at BASF and Procter & Gamble. Bold innovation is not easy, but it's not out of reach either. The examples and illustrations provided in this article model the way.
Tools and Frameworks:
> "Development Portfolios, Then and Now" reveals that the percentage of new-to-the-world products is down by almost half, while improvements and modifications to existing products have nearly doubled.
> "The Five Innovation Vectors" lists the essential elements that must be in place to yield maximum sales, profits and innovation productivity in mature markets.
> "Common 'Ideation' Approaches" notes that voice-of-customer methods appear to be more effective at generating breakthrough ideas.
Apple, Grundfos, Green Mountain Coffee Roasters, Keurig K-Cup, Nestlé, Lavazza, Corning, Emerson Electric, Hilti, 3M, Swarovski, Johnson & Johnson, Hewlett-Packard, BASF, Procter & Gamble, ITT
Based on numerous benchmarking studies by the author and his colleagues that have probed why some businesses are so much more successful at innovation than others, and then identified five vectors that must be in place to undertake true innovation.
About the Author:
Robert G. Cooper is Professor Emeritus 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 at Penn State University, U.S.A.