How can you speed up the innovation process in new product development?
Earlier this month I was invited to join a group of business leaders at Bradford University School of Management’s Innovation Club.
I co-authored a book, Innovation Management, with Prof Pervaiz Ahmed, and I was asked to talk about new approaches to product development that we have been involved in at NCR, Raytheon and other companies.
Here is a snapshot of some of the areas we covered
1. How do you drive more profit from the business?
Businesses need to find ways of deciding which, of many potential new products and services to invest in. The key to this is aligning the R&D interface with marketing. Marketing should understand the customer and their needs and market trends. They should be able to work in partnership with R&D development and challenge the relevance of new ideas and the value they will have for the customer.
The closer these two work together, the less wasted effort in the business, the more profit.
2. Customers don’t have a clue what they want
The caveat of what I said above is that if you give a customer what they said they wanted – there is a high chance they don’t sufficiently value what they said and more importantly, are not prepared to pay the cost of it.
Over the years I have seen customers delaying signing off projects because every time you start coming up with what they thought they wanted, the target has moved.
Market research can cost a fortune – and most of the time only tells you what you knew.
The way over all this is to build relationships in order to understand the customer better – to become trusted advisers to your customers. The closer you get to a customer, the more you can both understand what will really add value – and what is worth paying for.
We needed to develop our skills in understanding the exact customer need and how we could satisfy that. And the customer had to really understand what we were developing and put value on the cost.
Perhaps the most innovative part of our approach was that we shared the gains from a project – if we could deliver £20m more savings on a project, we would return 50% of that to the customer. That incentivised them to become involved and ‘own’ the project – and us to make sure we were listening and feeding back to the customer.
Below is the model we developed for aligning marketing with technology.
3. Partnering can speed up R&D – at a profit
One of the processes we have previously developed was to identify the competencies of all the various businesses we had acquired or units we had set up, such as knowledge labs.
Sometimes the competencies were not immediately obvious. I remember one where the skills were in managing services, as in an eBay-type approach.
I was interested in the School’s Innovation Club – and have made my own suggestion to them that we should put business problems on the table at future events and do peer problem solving.
What are the best things that you have done to speed up innovation?