Innovation management and new product development – what do you need to know?

What is innovation and new product development?

Innovation is a powerful force that sparks the creation of new ideas, redefines processes, and ignites growth. It's an engine for progress - making industries better and society stronger by inspiring us to think differently towards positive change. It involves bringing something new and original to the market or improving upon existing solutions in a significant way.

Innovation can take many forms, ranging from incremental improvements to radical breakthroughs that disrupt entire industries. Crafting an extraordinary outcome requires a daring attitude, artistry, strategy, the latest tech and most importantly market understanding; only then can one truly venture into uncharted waters to uncover ingenious solutions.

Successful management of innovation can lead to a wide range of benefits, including increased competitiveness, improved efficiency, greater customer satisfaction, and positive social impact. However, it also requires a commitment to continuous learning, adaptation, and improvement and a willingness to embrace change and uncertainty.

New product development involves bringing a new product or service to the market. It involves identifying consumer needs, generating ideas for potential products, conducting market research to evaluate the viability of those ideas, developing prototypes and testing them with potential customers.

The process of new product development typically includes several stages, such as idea generation, concept development and testing, product design and testing, and commercialization. During each stage, different teams and departments within a company may be involved, including product managers, engineers, designers, marketers, and sales teams.

Effective new product development requires a deep understanding of customer needs and preferences, as well as market trends and the competitive landscape. It also involves careful planning and coordination to ensure that the product is designed, tested, and launched successfully. A well-executed new product development process can result in increased sales, improved customer satisfaction, and a competitive advantage for the company.

Why product development and entrepreneurship?

There are numerous benefits to having a product, including:

1. Scalable revenue and profit generation: A product can generate increased sales for a business without significantly increasing headcount by licensing, manufacturing processes or other forms of intellectual property exploitation.
2. Increased market share: A product can help a business gain a larger share of the market by meeting customer needs and competing effectively with other products in the market.
3. Brand recognition: A successful product can help build brand recognition and reputation, making it easier for a business to attract new customers and retain existing ones.
4. Differentiation from competitors: A unique and innovative product can help differentiate a business from its competitors and create a competitive advantage.
5. Customer satisfaction: A well-designed and high-quality product can meet customer needs and expectations, leading to greater customer satisfaction and loyalty.
6. Cost efficiency: A product can help a business achieve cost efficiency by streamlining processes and reducing waste.
7. Innovation and creativity: Developing and launching a new product can encourage innovation and creativity within a business, leading to future growth and success.

Overall, having a product can provide numerous benefits for a business, including revenue generation, increased market share, brand recognition, differentiation from competitors, customer satisfaction, cost efficiency, and innovation and creativity.

What is the relationship between innovation management and new product development?

Innovation management and new product development are closely related and often used interchangeably. Innovation management refers to the process of managing and fostering innovation within an organization, while new product development specifically focuses on the process of bringing new products to market. Sometimes these terms get abridged to the much simpler term new product innovation.

Innovation management is a broader concept that encompasses all types of innovation, including process innovation, service innovation, and business model innovation, as well as product innovation. It involves creating a culture of innovation within an organization, establishing processes and systems to encourage innovation, and allocating resources to support innovation initiatives.

New product development, on the other hand, is a specific type of innovation that focuses on creating new products or services that meet customer needs or fill gaps in the market. It involves identifying customer needs and preferences, developing and testing prototypes, and launching the product to market.

Innovation management and new product development are closely linked because effective innovation management is essential for successful new product development. Organizations that have a strong culture of innovation and established processes for generating and evaluating new ideas are more likely to develop successful new products that meet customer needs and achieve market success. Conversely, companies that neglect innovation management may struggle to develop new products that are competitive and meet customer expectations. Therefore, innovation management is critical for successful new product development.

The importance placed by organizations on organizational innovation affects product development performance. Increased innovation management skills will contribute to an improvement in product design and development performance.

What are the advantages of an innovation management system for developing new products?

An innovation management system can provide several advantages for developing new products, including:

1. Improved idea generation: Innovation management systems can help generate a larger number of ideas for new products. The system can facilitate collaboration among team members and encourage the generation of creative ideas.

2. Enhanced evaluation of ideas: An innovation management system can help evaluate and prioritize new product ideas more effectively. The system can incorporate criteria for evaluating ideas, such as market potential, technical feasibility, and alignment with the company's strategic objectives.

3. Increased efficiency: Innovation management systems can streamline the new product development process, reducing the time and costs associated with bringing new products to market. The system can help track the progress of new product development and ensure that projects are on schedule and within budget.

4. Improved risk management: Innovation management systems can help identify potential risks associated with new product development and mitigate those risks more effectively. The system can provide visibility into potential risks, such as technical or market risks, and allow teams to address them proactively.

5. Better collaboration and communication: Innovation management systems can facilitate collaboration and communication among team members involved in new product development. The system can provide a centralized platform for sharing information, feedback, and updates, improving communication and reducing the likelihood of misunderstandings or errors.

In summary, an innovation management system can provide numerous benefits for developing new products, including improved idea generation, enhanced evaluation of ideas, increased efficiency, improved risk management, rapid introduction of new products, more successful launch rates, and better collaboration and communication among team members. Also, the early detection of ill-informed ideas for culling so that you get a better focus on the winners through improved resource planning and implementation.

What is the core difference between innovation and new product development?

The core difference between innovation and new product development is that innovation is a broader concept that encompasses all types of novel and valuable ideas, while new product development specifically refers to the process of creating and bringing a new product to market.

Innovation can include not just new products, but also new processes, services, business models, and other types of value creation. Innovation may or may not involve the creation of a new product. For example, a company may innovate by introducing a new service or implementing a new process that improves efficiency and reduces costs.

New product development, on the other hand, is a specific type of innovation that involves the creation of a new product or service that meets customer needs or fills a gap in the market. The process of new product development typically involves identifying customer needs, generating ideas, designing and testing prototypes, and launching the product to market. It is sometimes difficult to tell the difference between new product development and sustaining old products. A low-risk sustaining programme with little innovation can quickly morph into brand-new product development.

Similarly, process innovations are not product development, as they are not delivering products to the market. This can aid in developing new and improved solutions that meet existing and new requirements such as another type of thermal process that can extend shelf life and reduces the impact in terms of product quality parameters.

Besides, innovation is a broader concept that encompasses all types of novel and valuable ideas, while new product development is a specific type of innovation that involves the creation of a new product or service.

Best up-to-date examples

There have been many examples of innovative new product developments over the years. Here are some of the most notable:

1. iPhone: The iPhone revolutionized the mobile phone industry by combining a phone, music player, and internet browser into a single device with a touchscreen interface.
2. Tesla electric cars: Tesla disrupted the automotive industry with its electric cars, which offer a longer range and better performance than traditional gas-powered cars.
3. Airbnb: Airbnb disrupted the hotel industry by allowing people to rent out their homes or apartments to travellers, providing a cheaper and more authentic alternative to traditional hotels.
4. Oculus Rift: Oculus Rift re-introduced virtual reality into the mainstream by creating a high-quality, affordable VR headset that allowed users to immerse themselves in virtual worlds. Their new headset used cheap mobile phone technologies to address many of the foibles from earlier VR headsets.
5. Nest Thermostat: Nest's smart thermostat learns the user's preferences and adjusts the temperature accordingly, saving energy and providing greater comfort.
6. GoPro: GoPro created a new market for wearable cameras that can capture action-packed footage in extreme environments.
7. Amazon Echo: Amazon's Echo, a voice-activated smart speaker, revolutionized the way people interact with their homes by allowing them to control devices and access information with voice commands.
8. Impossible Foods: Impossible Foods created a plant-based meat alternative that looks, tastes and cooks like real meat, providing a sustainable and ethical alternative to traditional meat.

Not all innovations are successful, and there have been many examples of innovation flops over the years. Here are some notable examples:

1. Google Glass: Google Glass was a wearable device that allowed users to access information through a head-mounted display. Despite initial excitement, the product failed to gain widespread adoption due to privacy concerns and the high cost of the device.
2. New Coke: In 1985, Coca-Cola replaced its flagship product with "New Coke," a sweeter version of the soft drink. However, the change was met with widespread backlash from consumers, and the company was forced to bring back the original formula as "Coca-Cola Classic."
3. Segway: The Segway was a self-balancing scooter that was touted as a revolutionary mode of transportation. However, the high cost of the device and its limited functionality meant that it failed to capture a significant market share.
4. Microsoft Zune: The Zune was a digital media player that was intended to compete with Apple's iPod. However, it failed to gain traction with consumers due to its limited features and the dominance of the iPod in the market.
5. Amazon Fire Phone: The Fire Phone was Amazon's attempt to break into the smartphone market. However, the device was hampered by a high price tag, limited app selection, and a lack of innovative features.
6. QR Codes: QR codes were intended to revolutionize advertising and marketing by allowing users to scan codes with their smartphones to access information. However, the technology failed to gain widespread adoption quickly due to the inconvenience of scanning codes and the availability of alternative methods for accessing information. However, this is now beginning to change as QR scanners are built into every mobile phone camera app.

These are just a few examples of innovation flops that failed to gain traction with consumers and ultimately did not succeed in the market.

How do new technologies drive innovation management and new product development?

New technology can drive innovation management and new product development in many ways:

1. New technology can enable new product features and capabilities: Advancements in technology can enable new features and capabilities for products that were not previously possible. For example, the development of the internet and mobile devices enabled new features for communication and entertainment products.
2. New technology can improve efficiency and reduce costs by streamlining processes and removing expensive parts. 
3. New technology can open up new markets: Technology can enable new markets to emerge by creating new customer needs or by enabling companies to reach customers in new ways. For example, the rise of e-commerce and online marketplaces has enabled companies to reach customers globally and enter new markets.
4. New technology can facilitate collaboration and innovation: Technology can facilitate collaboration among team members and external partners, enabling faster and more effective innovation. For example, cloud-based collaboration tools can enable real-time collaboration and sharing of information and ideas.
5. New technology can enhance data analysis and insights: Technology can enable more sophisticated data analysis and insights, enabling companies to better understand customer needs and preferences and to make data-driven decisions about new product development.

New technology can drive innovation management and new product development by enabling new product features and capabilities, improving efficiency and reducing costs, opening up new markets, facilitating collaboration and innovation, and enhancing data analysis and insights.

Innovation management and new product development differences between the private and public sectors?

Innovation management and new product development can differ between the private and public sectors in several ways, including:

1. Objectives: Private sector organizations are primarily focused on generating profits and increasing shareholder value, while public sector organizations are typically focused on delivering public services and achieving public policy objectives.

2. Funding: Private sector organizations are typically funded through private investment or revenue generated from sales, while public sector organizations are funded through taxpayer dollars or government grants.

3. Market pressures: Private sector organizations face significant market pressures, such as competition and changing customer needs, while public sector organizations may not face the same level of market pressure.

4. Risk tolerance: Private sector organizations may have a higher risk tolerance than public sector organizations due to the potential for higher rewards, while public sector organizations may be more risk-averse due to the potential for negative public perception or scrutiny.

5. Decision-making processes: Private sector organizations may have more streamlined and efficient decision-making processes, while public sector organizations may be subject to more bureaucratic processes and political considerations.

Despite these differences, both private and public sector organizations can benefit from effective innovation management and new product development. Private-sector organizations may focus more on commercializing new products and generating revenue, while public-sector organizations may focus more on delivering public services more efficiently and effectively. Ultimately, the goals and strategies of innovation management and new product development will differ based on the specific objectives and constraints of each sector.

What is field innovation management?

Field innovation management refers to the study and practice of managing innovation within a specific field or industry. It involves understanding the unique challenges, opportunities, and trends within a particular industry and applying innovation management principles to drive growth and competitive advantage.

Field innovation management encompasses a range of activities, including:

1. Identifying and analyzing emerging trends and technologies within the industry.

2. Developing and implementing strategies for innovation, such as establishing innovation labs, conducting R&D projects, and collaborating with external partners.

3. Managing the innovation process, including ideation, prototyping, testing, and commercialization.

4. Building a culture of innovation within the organization, by fostering an environment that encourages creativity, experimentation, and risk-taking.

5. Measuring and evaluating the impact of innovation on the organization's performance and making adjustments as necessary.

Overall, field innovation management is an essential aspect of any organization's strategy for growth and competitiveness, particularly in industries where technological advances and disruptive trends are common.

What are the best books and international journals that describe innovation management and new product development?

Innovation Management and New Product Development Books

There are many great established textbooks on innovation management and new product development. Here are some highly recommended ones:

1. "The Lean Startup" by Eric Ries: This book provides clear and informed coverage and practical guidance for building and scaling a successful startup by using a lean approach that emphasizes the key concepts of experimentation and iteration as an evidence-based approach.

2. "Design Thinking: Integrating Innovation, Customer Experience, and Brand Value" by Thomas Lockwood: This book explains how design thinking can be used to drive innovation and create value for customers with many up-to-date examples

3. "Innovation and Entrepreneurship" by Peter Drucker: This classic book explores the process of managing innovation and how to implement it effectively, including strategies for identifying and developing new opportunities.

4. "The Innovator's Dilemma" by Clayton Christensen: This book describes how established companies can be disrupted by new, innovative technologies and provides marketing management guidance for how to avoid this fate. Throughout his career, Christensen is a leading professor of innovation management and a highly respected thought leader in the business community.

5. "Business Model Generation" by Alexander Osterwalder and Yves Pigneur: This book provides a practical framework for developing and testing new business models, including tools for visualizing and communicating business concepts and management processes.

6. "Crossing the Chasm" by Geoffrey Moore: This book provides guidance for how to successfully market and sell innovative products, including strategies for crossing the "chasm" between early adopters and mainstream customers. It describes the real-life challenges behind the great breakthrough products.

7. "The Art of Possibility" by Rosamund Stone Zander and Benjamin Zander: This book provides inspiration and guidance for unlocking creativity and innovation, including strategies for overcoming obstacles and thinking outside the box.

These books provide a variety of perspectives on innovation management and new product development and offer practical guidance for how to succeed in these areas.

Innovation Management and New Product Development Journals

There are several leading journals that publish research and articles related to innovation management and new product development. Here are some of the top journals in this field and the wider business world:

1. Journal of Product Innovation Management: This journal is dedicated to research on new product development and innovation management. It publishes articles on topics such as innovation strategy, product design, launch, and new product development processes.
2. Research-Technology Management: This journal is focused on the management of technology and innovation, including research on new product development, R&D management, and innovation strategy.
3. Harvard Business Review: While not focused exclusively on innovation management and new product development, the Harvard Business Review is a highly respected publication that often features articles on these topics. The publication features articles written by leading business thinkers and practitioners.
4. California Management Review: This journal publishes research on a wide range of topics related to management, including innovation management, new product development, and technology management.
5. Journal of Business Venturing: This journal publishes research on entrepreneurship and new venture creation, including studies on innovation management and new product development in startups and emerging companies.

These journals are all highly respected in the field of innovation management and new product development.

About the Author

Raglan Tribe has spent his whole career in Innovation Management, New Product Development and Entrepreneurship. He was the head of Chassis Engineering for TRW Inc. and then Group R&D Director for De La Rue plc. For the last 20 years, his consulting practice, Mindsheet Ltd. has helped numerous small to large organisations grapple with the complexities of Innovation and New Product Development. His research in the private and public sectors is widely regarded and published by many magazines and journals in the field.