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Why Companies Lack Successful Innovation - BusinessWeek

A shortage of innovation isn't always senior management's fault. Marketers deserve some blame for not having the right processes in place

By G. Michael Maddock and Raphael Louis Vitón

It is easy to blame chief executives and senior management for not devoting enough attention to introducing new products, but that is too simplistic an explanation for why radically new products are so rare. Marketers deserve some of the blame for at least three reasons:

Successful strategic innovations need more than a great idea.

There's no shortage of new product concepts. We are willing to bet you could come up with a handful of intriguing ones before lunch if you set your mind to it.

But new ideas by themselves are worthless. You need to move from idea to execution, and that is where the majority of companies stumble. You need a new-product development process—one that is codified, efficient, and repeatable, and which allows you to turn a notion into something you can sell.

But there aren't a lot of marketers who have tried to formalize a new-product introduction. Too often, marketers see their job as simply coming up with the idea. They leave the actual development and production to someone else and then profess to be surprised when the finished product is not exactly what they had envisaged. (This is true, by the way, whether we are talking about introducing new consumer products or selling business-to-business.) It is always nice to have someone else to blame when something goes wrong—such as, the product didn't sell. But it isn't the best use of your time, or of company resources.

The takeaway point from all this is that you want to create a process that will allow you to introduce a new product the same way every time. The procedure needs to be replicable—and easily understood internally—so you can train new hires to execute it. The process should become a legacy in your organization.

There is a shortage of Renaissance men (and women).

This builds off the previous point. As we have just seen, there are two distinct components to developing a successful new product: Coming up with the idea and then putting it into practice—i.e., executing it. We must make sure that it is produced exactly as designed and that the marketing that follows is consistent with the overall message the product is supposed to communicate. Failure can arise when we look for people who possess both skills, but in reality such people are extremely hard to find in any organization. Most people are naturally better at one or the other part of the process.

Instead of looking for someone who is good at both, it would seem more efficient to let people do what they do best. Since most companies have people who are fairly good at carrying out a mission once it is defined for them, it probably makes more sense to keep that capability in-house, and to look to outside resources to help you discover new ideas and fresh needs in the marketplace. Once the outside firm has unearthed those opportunities, the company can develop them.

Marketers tend to be fatalistic.

Marketers seem to go into new-product introductions with the expectation that they are going to fail. So they deal with new-product failures rather like the way an overweight person does with their problem: We periodically make half-hearted efforts to fix things…and then give up.

Just like someone who resigns himself or herself to being overweight, marketers conclude that there is nothing they can do to improve their batting average when it comes to introducing new products. Instead of throwing up their hands and saying "woe is me," they should be studying their past successes to see what they should do the next time they introduce something new.

That, of course, takes us full circle, underscoring as it does the need to have a replicable process to make new product development as painless as possible.

Blaming the CEO and others for not being more supportive about new product development is a waste of both time and mental energy. Look in the mirror and try to figure out how to make things better. Addressing the three problems we just talked about is a good start.

This article originally published in BusinessWeek

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Comments

adam hartung	December 31, 1969 7:00 PM Agreed that it takes more than a CEO's commitment for an organization to implement innovation. The problem with most organizations is an amazing fascination with the internal mechanics of how they do things - and a dramatic lack of external information. Innovation quickly disappears when people focus on execution - and process. To increase innovation it is critically important that the whole organization pay a lot more attention to small and lost customers (not the direction most CRM applications drive us), and even more attention to competitors - especially those on the fringe who are not most like us. It's when organizations become externally focused that they see market shifts, as well as both the need for innovation as well as the application. http://tinyurl.com/dkrl7q
Michael Plishka	December 31, 1969 7:00 PM Interesting article though I disagree with the assessment that marketers expect things to fail. On the contrary, in my 20 years experience, marketers tend to be extremely optimistic and often fail to appreciate the complexity of actually getting a product to market in an effective manner. If a culture permits key players to do their jobs with a bias towards expecting failure, there is bigger problem...
Larry MacDonald	December 31, 1969 7:00 PM You said: >>>But new ideas by themselves are worthless. You need to move from idea to execution, and that is where the majority of companies stumble. You need a new-product development process—one that is codified, efficient, and repeatable, and which allows you to turn a notion into something you can sell. *** Not only are most ideas worthless, they are most often harmful if used as the basis for a new product. Ideas are the WORST WAY to select product concepts to develop. They lead to failure MOST of the time. The most informed way to select what product to develop is to use the market research to identify REAL NEEDS with EXISTING DEMAND that are not being met. Only then should you look at ideas for meeting that need.
Jose Gomez	December 31, 1969 7:00 PM Good point. Companies need to find the balance between the two types of people as described in your second point. The book "The Design of Business", by Roger Martin is about that balance between reliability and validity,or algoritms and innovation, and how the company must have that unique people who can bridge or translate from one group to the other.
Fabien Fedida	December 31, 1969 7:00 PM The graal is to achieve in the enterprise what web 2.0 has achieved on the web. This lighthearted jayleno-man-on-the-street video, which WILL MAKE YOU SMILE http://www.youtube.com/watch?v=3bMVzTDP8c0 (passersby interviews start at 00:50s), explains how product development and product lifecycle management ought to evolve Lack of product innovation can't be blamed only on the CEO... but, ultimately, the CEO's obsession must be to find ways to maximize the intellectual assets of his company for better product innovation. And so Yes: the technology is now mature to bring all product stakeholders (including consumers) in the product innovation loop, and harness the collective intelligence of all. In particular a more PERVASIVE USE OF 3D can help because it is a language/media that everybody understands “naturally”: it allows you to SEE NOW the product being developed as it WILL be, as it WILL function, as it WILL be maintained, as it WILL be recycled… With 3D, you can SEE and participate in the product lifecycle: it makes you “vibrate” and engage :) Fabien PS: By the way, PLM stands for Product Lifecycle Management and includes 3D Computer Aided Design, Digital Manufacturing, Digital Simulation, 3D Shopping experience. Example: the plane YOU fly is completely designed in 3D down to the seat or bolt; it is also virtually simulated and virtually built in a virtual factory, before the first prototype is actually manufactured in a real factory. Same with YOUR car, YOUR phone, and even YOUR shampoo bottle, etc.
Robert Brands Innovation Coach	December 31, 1969 7:00 PM Michael, you are commenting and I agree on many of the imperatives to Create & Sustain Innovation, fully aligned with "Robert's Rules of Innovation (Wiley, march 2010)

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