Product Innovation: Finding Better Ideas

Evolution versus revolution

The trouble is, innovation is now a management buzzword. That makes us think innovation is somehow “new” and therefore potentially revolutionary.

In reality it’s more like evolution. It’s going on all the time. In business, you can spend a lot of time looking for an innovative breakthrough while your competitors are constantly evolving.

Innovation is a lot closer to outmoded terms like “product development”. Not quite as exciting, I admit, but that’s a similar process that achieves the same outcome: it makes things better and more marketable.

Breakthrough inventions are rare. There are millions of entrepreneurs, but not many inventors. Successful entrepreneurs are the people who make an invention work in the marketplace. Henry Ford did not invent the V8 engine. He saw a market for it and insisted his engineers develop one. That was an innovative process.

Today there is a market for a clean, green engine. There is nothing new about an electric car but the hunt is on for one that is better and more marketable. Slowly – perhaps too slowly for some – one will evolve.

Putting a simple innovation process in place

All businesses are surrounded by ideas. What you need are people to express them. New initiatives come from diverse perspectives – customers, suppliers, operations people, even competitors. If you want some lateral ideas, set up an inclusive think tank and spend an hour examining your existing product from these perspectives:

• Environment: what’s changing. Products have life cycles. Where is yours in the cycle? Do you need to adapt your existing product or develop a new one?
• Complexity: think of the opposite version of your product. If you have a premium item, consider a Lite. If it’s simple, investigate a complex one that solves more of the customer’s problems.
• Value: how elastic is your market? If you want bigger margins, what add-ons would underwrite higher prices in profitable volume?
• Range: unbundle your offerings into more marketable parcels. Develop new versions or upgrades. Build a developmental sequence into your range.
• Collaboration: if you don’t have the product in your range, form an alliance with someone who does.
• Lateral: you’ve got a customer base. What else do they spend money on? Introduce adjacent products that capture a bigger share of their wallet?

This doesn’t only work for products like cars. Services develop in the same way. Look at the emergence of premium movie theatres. They acknowledge the environment now includes a demographic that wants a premium offering.

These theatres provide a more complicated product in a bundled form that offers higher value, capturing a bigger share of the consumer’s wallet.

Instead of going to a bar for drinks, followed by a restaurant for dinner and then a movie, premium theatres do the lot in one venue, leveraging off the same film they are already showing in standard theatres.

Try brainstorming some fresh ideas around these themes. An hour spent on this process may not lead to a major new innovation, but it will show you where to start looking.

Make a habit of it and you will start to build innovative momentum.