Innovation - a game of chance

In recent years, innovation has become a key business driver playing an increasingly vital role in delivering long-term value. With Asian companies becoming increasingly adept at product design and rapid incremental innovation, western companies will need to differentiate themselves by maintaining a balanced portfolio of established, improving and, most importantly, radical new products in order to survive. Our clients include major global brands and are expert at incremental innovation, taking advantage of new technologies, materials or manufacturing techniques to deliver a regular stream of products. However achieving a step change in product conception and design often requires starting from scratch, unpacking all previous mindsets and processes; a real challenge for many of our partners. Our approach to successful, fundamental innovation balances three basic criteria: business context; technology; and consumer needs. Apple's iPod admirably demonstrates what happens when these three interact effectively: integration with iTunes addressed a consumer need to easily download music legally and manage music on their MP3 player, whilst delivering a new profit stream for Apple. The ultimate product was highly desirable, well designed and fashionable - able to command a premium price. New ideas do not necessarily balance all three criteria exactly, but if the innovation process does not address the business, technology and consumer contexts, it's doubtful if it will truly realise its maximum potential. A growing perception that 'design = innovation' has resulted in product designers acquiring a reputation as gurus in the innovation field. Whilst many product designers can use their understanding of real customer needs to shape consumer desires, without a fundamental understanding of business strategy and technology landscape there is a risk that innovation in this context simply becomes redesign. This incremental innovation is insufficient to reshape a marketplace and is exactly what is threatening companies in the West. So what should these companies do? First, they should recognise that many product development processes are 'tuned' towards efficient incremental development. These processes will not drive new growth or provide a long-term defence against the 'Dragon's Breath'. Real innovation is broad ranging, with looser timescales, and will result in a degree of failure. This should be expected not feared. The selection of project teams and management of the creative process also needs to change. Project teams should comprise both the highly creative and those able to focus on business detail and technical practicality. Managing such a team is difficult, but the conflict that will occur should be actively encouraged. One of the key problems inherent in innovation is identifying what you've missed. At Scientific Generics we use a range of tools to map the 'innovation space', revealing further avenues for exploration and generating hundreds of ideas. We believe that bringing the right 'kind' of minds and experiences to bear is key. Many companies baulk at the idea of evaluating so many new concepts, but we have shown that our strong, multi-disciplinary teams can filter ideas very quickly and effectively, leaving a few concepts worthy of real investigation. It is also important to test viable, qualified concepts with both consumers and industry prior to full-scale product development in order to validate the technology used, the functionality, the business case, product embodiment and real market opinion. Put simply we must test the Design where Design is a big D word synthesising all of these aspects. External insight is important, especially in translating the needs of consumers, who may be reviewing a product they did not even know they wanted. Real innovation has acquired a reputation of luck and chance. This is because so many companies innovate in the wrong way. A recent survey in Business Week revealed that 96% of innovation initiatives fail to meet the required return on their investment targets. There are always the lucky breaks, the serendipitous moment that leads to unexpected success in the marketplace. Our ability to successfully innovate on demand is key when our partners are looking to tip the innovation odds in their favour.