Getting an ROI on New Product Innovation

In research on what works and what does not in terms of product innovation. Some observations:

• Innovation Man, who leaps over tall buildings, overcoming roadblocks by going underground and fighting the system is more a myth than reality. Most likely he would be banned for being not in sync with the executive team. This is also not a repeatable approach you can emulate.

• Finding the BIG IDEA, while important, is not the end of the journey. It really does not pay off until you achieve commercial success.

• Encouraging all employees to innovate on their own initiative as does 3M and Google, has limited success as most people are too busy with their day job. This also assumes that there are processes and techniques in place that can leverage this time investment.

• Making innovation efficient and routine via process works ok for incremental innovation. Such an approach does not address the need for break-through or disruptive innovation.

The basic problem is that organizations are designed for on-going operations, good for today’s customers and defeating today’s competitors. Built for efficiency and accountability, they are performance engines.

We too often find from experience, that the brilliant new ideas and business opportunities derived in brain-storming sessions quickly lose momentum. The follow-through is usually relegated to too few people with too little investment. Lack of focus and commitment produces marginal results.

Innovation, which can create whole new product categories and lead to substantial change in market position, on other hand is non-routine and uncertain. Innovation in this sense needs more than ideas, it needs a special team, Innovation leaders and a plan of attack. Conceptually, the mindset is that of building a brand new company from the ground up.

Utilizing a dedicated team with a strong Project Leader that reports to Top Management has a great deal of merit. This can be carried to a separate organization as witnessed in the Aerospace Industry. Boeing Phantom Works and Lockheed Martin Skunkworks are examples of where the main focus is to investigate and prototype significant innovation and new product concepts. This dedicated team can then be supported by the performance engine or on-going operations. An acquisition in a new growth market segment could provide the dedicated team for innovation.

The process of Innovation can be supported by training, tools and methodologies used by the Innovation Team. Scenario Development, Market Segmentation, Blue Ocean Strategy can be combined with definition of Virtual Products, Dream Catalogues, Innovation Fairs and various means to introduce the Customer to truly innovative solutions to their problems. Strategic and Innovation consultants can support efforts to identify emerging growth markets, customer needs and product opportunities.

In the end, the commitment of the organization to the selection and support of a dedicated team will be the most important strategic move it will ever make to propel its new product engine.

Combining Vision and Innovation to Create the Future

© Rich Kohler 2017. All rights reserved. For copies, please contact Rich at

Leave a Comment