Wednesday, September 15, 2010

The Importance of Improving Innovation

Successful innovation and new Product and Service development is a vital way to achieve business growth, market differentiation, customer loyalty and profitability.

If your innovation engine is performing well the benefits can be substantial.
Consider one of today’s classic new product successes:

“In the third quarter of 2009, Apple’s iPhone division delivered $1.6 billion in profits, while Nokia earned just $1.1 billion. What make’s these figures eye-popping is that Nokia’s global handset market share hovered around 35% while Apple’s was less than 3%.” [Source TechCrunch 11/11/2009]

So what does that mean? It means you don’t have to be the biggest to be the most profitable—but you do have to be the most highly differentiated. It means the leverage to be gained from innovation and new product leadership can be orders of magnitude.

But the Business Challenges to achieve strong business growth can be substantial:
  • Should future growth plans focus on market expansion, channel extension, business acquisition or new product and service developments?
  • How should the innovation and product development goals be achieved?
  • Does our development process provide all the necessary consistency, transparency and rigor.
  • Have we done the market research and industry homework? Do we have the right planning and control systems in place to track our success? And is the accountability clear for all the key roles?
  • What about our internal teamwork, collaboration behaviour and communications practices? Do we have the reward programs and cultural norms necessary for positive risk taking and exciting innovation?
  • Do we have suitable, motivated and experienced people and do they have supportive commitment from executive management?
Improving the performance of new product development capability and generate new, technology based, product and service innovations is critical. It is vital that both large and small businesses face the challenges of better innovation and stronger product development as they strive to grow, compete and maintain profitability through their new products and services. Businesses need to continually optimise their innovation engine.

I hope this provides at least some small contribution to help the cause of better innovation.

I’m interested in feedback and views to help achieve better product development. Please contact me to share your views and thoughts.