New product development

“Process of developing a new product or service for the market. This type of development is considered the preliminary step in product or service development and involves a number of steps that must be completed before the product can be introduced to the market. New product development may be done to develop an item to compete with a particular product/service or may be done to improve an already established product. New product development is essential to any business that must keep up with market trends and changes.”(http://www.businessdictionary.com/definition/new-product-development.html).

Figure 5.1 Evolution of innovation process management systems file://localhost/(http/::catalogue.pearsoned.co.uk:assets:hip:gb:hip_gb_pearsonhighered:samplechapter:AhmedC05.pdf)

Figure 5.1 is a chart, which displays the six generations of innovation systems and could be considered a prediction of the direction innovation is taking in the future. Anticipation can be a useful tool to plan ahead of your competitors. They may have a new product ready to release and plan to do this first, before their competitors attempt to establish their own product. If a company were to rely on anticipation, they may decide to delay the release of their product until later, so they can gain competitive advantage by making their product ‘better’ – It’s a risky method because many consumers may decide to buy the first product that hits the shelves, but if a company understands how your industry works and changes, they are then able to confidently make such decisions, more to their own benefit.

However this suggests that innovation follows a strict, linear process of development, when innovation is considered more unpredictable. Kevin Kelly describes in his blog how unpredictable he thinks innovation can be. “Innovation is fairly unpredictable. This is increasingly true as the amount of disruption possibility increases. Again, we have executives who have been taught to believe, and their compensation reinforces, that businesses are organizations which produce regular, steady outcomes in the face of any environmental uncertainty or economic chaos.” (http://timkastelle.org/blog/2011/01/an-innovation-definition-something-that-does-not-work-yet/).

This ideas is reinforced because if Innovation is making something that already exists better by adding value and desirability, I have to ask the question – If it didn’t have value or desirability before, how do you know you can create this?

It’s all about taking risk, which K. Kelly has suggested, executives aren’t willing to do.

Figure 5.8 Open innovation model.

“To fully benefit from the open innovation model, companies now realized that they need to evolves from a technology scouting approach to one of developing an innovation ecosystem (or network of opportunities) made up of a series of nodes (small start-ups, brokers, innovators etc.), which are held together by a mutual self-interest, trust and open communication” (http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/AhmedC05.pdf).

The open innovation model suggests that a single company may not be able to make a successful new product alone today in the 21^st century, but my communicating with external sources it can be possible, however it is understandable that not all companies would feel comfortable doing this. Executives may prefer to keep their cards close to their chest, understanding that Knowledge is Power.

On the other hand this could become a competitive advantage, as the product development process would have the diversity of various parties coming together sharing a common goal, resulting in the exchange of ideas from various perspectives and taking different approaches, which may lead to the success of the product launch and life cycle and even lower the risk factor of the product failing.

Knowledge is power but perhaps sharing knowledge is how companies today will survive the economic crisis and comfortably adapt to the constant change in consumer trends and behaviour.

Factors in innovation success. (http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/AhmedC05.pdf).

It is unknown whether the factors for innovation success are in chronological order, however notably; communication (both internal and external) is at the top of the list.

The list also suggests the importance of employee engagement, believing that open-minded management is also a key to the factor of success.
However it does not mention the importance of all employee engagement, for example the HR department, who organize the balance between work and life, provide support for everyone in the company etc. who I believe would play a key part in the success of innovation – a happy workforce is a productive workforce.

My next blog entry will focus on Process Innovation.