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Supporting Innovation
Defining Goals
Success Factors
Supporting Innovation
Among the many challenges businesses face, perhaps none is
as crucial as the mandate to change and grow. If companies
stay still, they die. One area where many companies attempt
to change -- and all too often fail -- is new product development.
Why do these ventures fail? According to TEC new product
development experts Mitch Goozé and
Nick Webb, many businesses either expend
too much energy generating a variety of new products (without
necessary forethought, screening or testing) or too little
energy (preferring to "stay the course" with their
existing product line).
"Slow and plodding doesn't get the job done," Goozé
says. "Without innovation, businesses fall prey to aggressive
competitors, which in turn leads to waves of customer defections
when someone else's product outstrips theirs."
Of course, no one says product innovation is easy. According
to studies, three out of four new product ventures fail in
the marketplace; a sizeable fraction of these new products
don't even make it to market.
Companies most often succeed in new product development when
they leverage their own core competencies. There must be strong
links between the new product and a company's:
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Resources |
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Marketing expertise |
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Distribution channels |
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Sales |
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Technology and operations |
"Without these core competencies in place, you shouldn't
even be contemplating innovation," Webb advises.
The good news is, businesses can design internal roles and
structures to support new product development. Start by recognizing
that the process essentially touches on everything your business
does.
"Innovation stimulates the company from top to bottom,"
Goozé notes. "As new products progress from idea
to reality, all functions become involved -- from manufacturing,
supply chain and distribution to marketing and customer service.
The process requires the company's executives to think long
and hard about the changing needs of their customer base,
as well as the threats -- real and imaginary -- posed by the
competition."
Goozé stresses the role of marketing, in particular.
Marketing considerations should start when the new product
is still on the drawing board, he says. Ask all the basic
questions, such as:
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Who is this new product for? |
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How will it be used? |
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How does it fit into our current line
and how will it affect our future products? |
"Market research, whether conducted in-house or through
an outside agency, is the first essential step toward building
a welcome response to your new product in the marketplace."
Webb urges companies to search exhaustively for the right
product advantage. "Early on, identify precisely what
your customers want and need," he says. "Use customer-focused
research to guide the process. Use that same research to pinpoint
what works and what doesn't in your competitor's offerings.
When you get to the prototype stage, go to customers and test,
test, test."
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