How do you innovate?
How do you innovate?
Bringing Innovation to the Innovation Process:
How Modern Research Techniques are Driving Smarter New Product Development
In today’s fast-paced and fiercely competitive world of new product development (NPD), speed and flexibility are important. Many companies are starting to realize that the old, sequential approach to developing products isn’t cutting it anymore. Instead, they are looking more towards holistic approaches to NPD (often likened to rugby), where the ball is passed within the team and they move as a group up the field.
Have you started to notice a change in the rules of new product development? It used to only require low cost, quality and differentiation to compete in a market. Now companies are finding that they also need speed and flexibility – today’s consumers are always demanding new, better and different.
You can see examples of this trend as companies place more and more emphasis on new products as a source of sales and profits. At 3M, for example, new products accounts for about 1/3 of its total sales, perhaps one of the reasons they are #3 on Forbes “10 Most Innovative Companies”.
Old way vs. New Way: So What’s different? See the below chart which highlights some of the key differences between the two.
Under the older, stage-gate approach (see diagram below), the NPD process was like a relay race - one group passing off the baton to another. Functions were specialized and segmented (e.g. marketing people worked on the customer needs, perceptions, concepts while R&D developed product designs). Not surprisingly, the process was very rigid and long.
Under an Integrated New Product Development approach, there are not separate teams in charge of different pieces. Alternatively, a group of multidisciplinary team members work together from start to finish. Instead of defined, highly structured, sequential stages, this approach is about the interplay between team members.
This new approach has six characteristics: built-in instability, self-organizing project teams, overlapping development phases, “multi-learning,” subtle control, and organizational transfer of learning. The six pieces fit together like a jigsaw puzzle, forming a fast and flexible process for NPD. Most importantly, it is a vehicle for introducing creative, market-driven ideas and processes into an old, rigid organization.
The figure below illustrates the process for the old New Product Development stage-gate model (Fig A), versus variations of an Integrated New Product Development interactive model (Figs B & C).
An Integrated New Product Development approach is essential for companies seeking to develop new products quickly and flexibly. The shift from a linear to a coordinated approach encourages trial and error and challenges the status quo. It stimulates new kinds of learning and thinking within the organization at different levels and functions.
So where does market research come in? Market research and insights are an integral part of this process. Compared to traditional market research, new market research techniques need to be:
- Faster and more flexible
- Focused on listening more than asking
- Appropriate to the decisions being made (‘Goldilocks’)
Faster and flexible. Market research firms should be adaptable in their approaches. Consideration should be given to what part they are playing in the innovation process and how they can tailor their research to those needs. Whether it be reduced base sizes, online reporting or using newer, app-based technologies, Market Researchers should always be looking for ways to reach consumers faster and quicker.