Manufacturers know that innovation is the key enabler to designing and building new products that will ultimately succeed in the market. Innovation is also considered a major driver of the economy, especially when it leads to new product categories and increasing productivity. What, however, constitutes innovation when it comes to new product development? Can product development teams really promise innovation in their products or are most new products simply improved variations of existing products?
For many manufacturing companies, innovation typically begins in R&D. Ideas spun out of R&D need to obtain buy-in from management, who must determine and prioritize which ideas product development teams should pursue. Senior management must focus on setting the direction for innovative product development by identifying the criteria by which opportunities are assessed and by committing resources to pursue opportunities that fulfill those criteria.
Many companies begin the innovation process by asking questions such as: will this product meet an unmet customer need at a price point that makes sense? The answer to that question will identify what innovations might have market appeal. Another question to ask is does this product fit with our current technology, brand, manufacturing processes?
Opening up the innovation process
Large organizations tend to funnel new development projects forward through stage gates, often stymieing creativity in the process. A new way to generate ideas is through “open innovation,” a term coined by Henry Chesbrough, a professor at the University of California, Berkley. Open innovation refers to the inflows and outflows of knowledge used to accelerate internal innovation.
The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should develop a strategy to seek out ideas from both inside and outside their corporate walls. This might mean buying or licensing processes or inventions (e.g., patents) from other companies. Open innovation, therefore, is the antithesis of the way traditional R&D departments work.
Many innovative product development programs fail, not as a result of engineering challenges, but because of organizational failures. From an organizational standpoint, companies need to assign a strong executive sponsor to be engaged in the innovation strategy and make sure there is an established set of tools, processes, techniques and training in place to transition ideas into the developmental pipeline.
In addition, manufacturers need to develop a clear set of selection and filtering criteria to weed out bad ideas and narrow in on good ideas.
Opening up the innovation process enables companies to generate new product ideas more quickly using both internal and external resources and identify global trends faster. Manufacturers must learn to treat innovation and idea management as a true business discipline and strategy for growth.
Avoiding “Not Invented Here” (NIH) Bias
Expanding upon Chesbrough’s concept of open innovation is the “Not Invented Here” syndrome, a term used to describe persistent corporate or institutional culture that avoids using or buying already existing products, research or knowledge because of its external origins. In manufacturing, this amounts to rejecting a potential solution—or new product idea—based on the fact that it was not developed internally.
The prevailing symptom of NIH is rash of re-inventing wheels, bringing along with it lost time and money, along with the corresponding loss of opportunity. The reality is that many organizations have created successful new products by taking an existing idea or concept and applying it in a novel way or improving upon it. Leaders that embrace true innovation seek the best ideas from both inside and outside corporate walls.
In the light of globalization and a wide range of innovative ideas, the NIH bias should be reconsidered. High-level management should work to change this type of corporate culture in order to encourage cooperation between partners and foster innovation. “Not all the smart people work for you,” says Chesbrough. “By leveraging the discoveries of others, companies can produce spectacular results.”
Enabling customers to have a voice
Customers—hundreds, thousands, possibly millions of them—are using your company’s product every day, making them well-positioned to suggest future product features and enhancements. Many manufacturers are giving their customers a voice in the future development of their products.
The key to successfully incorporating customer feedback into the innovation process is to ask questions that will elicit a response that proposes a challenge that can generate real solutions instead of disjointed ideas or suggestions with no path toward implementation. Social media sites have made it easier than ever for organizations to have an open forum through which customer can share their opinions, complaints and questions on current and future products.
Engaging and integrating customers’ feedback on products should be a vital part of a company’s product innovation strategy. Integrating the customer’s opinions into the design process shortens the development time spent on rework. Customer adoption and satisfaction are accelerated because the customer’s voice is integrated into the overall design.
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