Business and Innovation

Dave Pollard writes that businesses are once again starting at look at innovation as a way to grow, and discusses a survey by the Boston Consulting Group:

In what I think is the most useful section of the article, several innovation ‘traps’ are outlined:

  • The Denominator Trap — believing an innovation can capture 100% of an existing product’s market from competitors
  • The Sustainability Trap — underestimating the costs of sustaining market share for the product in years after the initial launch
  • The Substitution Trap — not anticipating how an innovation can cannibalize the market for the company’s existing products
  • The Uniformity Trap — not treating every new product launch as unique, requiring different approach and sustenance
  • The Tactical Trap — short range thinking, not assessing the strategic impact of the new product, competitors’ likely response, and the ‘fit’ of the product with the rest of the company’s line, image etc.

    Some additional ideas that I suggest in my Innovation Incubator process:

  • Consider having your core innovation team in a separate, autonomous business unit or company. Creative minds are often very entrepreneurial, and flourish when they are relatively free from bureaucracy, and when they have some of their own skin in the game.

  • Use ‘pathfinder’ customers on your advisory team — the select few existing customers who always seem to be a step ahead of the pack, open to new ideas, but solidly aware of marketplace realities

  • Learn the process of ‘thinking customers ahead’. Through scenarios, iterative ‘what if’ exercises, future state visioning and other practices, you can help your customers imagine where their own business will be and could be three or five years from now, and hence what they might want to buy from you by that time to stay ahead of the competition.

  • Don’t leave valuable knowledge on the table. An understanding of how consumer tastes are changing in completely different areas from those in which your business operates, an understanding of where the economy is going, and an understanding of demographic changes can provide enormous insight into the potential market for your innovations.

  • In assessing ideas, don’t overlook aspects other than customer enthusiasm: deliverability, quality assurance, sourcing of materials, strategic ‘fit’ with your other products, your company’s image and your corporate ‘culture’, the ‘packagability’ of the product (easy to explain, distribute and use), possible alternatives, and possible conflicts (competing with your customers, regulatory hurdles). Some wonderful ideas have crashed and burned for reasons that had nothing to do with market acceptance.

  • There’s no such thing as too much testing. Small, continuous testing of every aspect of your innovations — checking and rechecking the market, product quality, timing, ease-of-use, perceived value, life cycle, competitors’ offerings, and many other things will allow you to ‘fail fast and fail early’, so that the probability of a successful launch is maximized.

  • Published by

    Rajesh Jain

    An Entrepreneur based in Mumbai, India.