In the current global crisis, innovation has never been more firmly on the corporate agenda as the key to survival and growth.
With growing competitive pressures, the fragmentation of markets and the relentless trend towards the commoditisation of products and services – the creation of a highly effective and highly efficient innovation program is paramount in order not only survive but to thrive in this environment.
The Innovation Challenge
New products typically account for approximately 30% of company sales when defined as products which have been on the market for 3 years or less. This figure does vary between industries and companies, but it is clear that the rate of new product introductions and corporate dependency on their success is increasing and is expected to grow by a further 21% over the next 5 years.
Despite the demand for growth through innovation, almost half of new product innovation projects (NPI) fail to deliver against their project objectives. Worse still they are often late to market and over budget. Across any measure, the contrast between “average” performers and “best” performers in new product surveys is staggering. Average companies get average results.
An Effective Innovation Program will…
Translated into business results, an effective innovation program will shift the portfolio towards fewer projects with bigger returns and better profit margins.
• Increase the success rate of new products
• Reduce time to market for new development projects
• Increase the proportion of projects delivered within budget
• Shift portfolio balance away from incremental product development Increase the proportion of ‘new to company’ and ‘new to market’ products
• Reduce the total number of development projects
• Increase the average value of each project
• Increase sales and margin
There are a set of clearly defined core best practices that can be adopted by companies who want to increase their average innovation to a highly effective one.
The identification and implementation of innovation ‘Best Practices’ has been the focus of new product development management research for decades. Leading this field of research for many years has been Dr. Robert Cooper whose studies have identified 3 key drivers of innovation success: Strategy, Process and Resources.
In the parallel world of implementing effective organisational change, the mantra to focus on People, Process and Technology has prevailed. Technology is recognised as a key enabler of increased productivity and, when implemented with due consideration of processes and resources, can deliver significant payback.
“Companies who focus on these 3 dimensions realise a 30% to 70% increase in the productivity of their innovation investments”
There are many tools and processes which companies use to increase their innovation effectiveness and there are several definable phases of maturity through which companies pass as they progress towards best practice.
PRODUCT MATURITY MODEL
Product Innovation Maturity Model (PIM) Integrating these frameworks is the basis for the Product Innovation Maturity model which places 4 key drivers of organisational change in Innovation Governance as the horizontal swim lanes and the 4 phases of Maturity as the columns. This model assists in defining the EXISTING and PLANNED position against each of these dimensions.
The Product Innovation Maturity Model provides a framework for the realisation of increased profitability through New Product Innovation. The model is an effective way to communicate the interdependency which exists between the key drivers of innovation performance (strategy, process, resource and technology).
It provides a systematic framework for the progression toward an enhanced, world-class Product Innovation capability. Prodex Systems use the Product Innovation Maturity Model as a framework for defining and deploying its integrated range of consulting, training and technology services to achieve Product Development Excellence.
Want to know more about Innovation Maturity
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Want to discuss your Innovation Portfolio Strategy and identify the holes?
Contact Prodex Systems Senior Innovation Consultant and Managing Director, Gerard Ryan email@example.com