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At the base of Dr. Kantor’s pyramid are process improvements and incremental product changes. In the middle are new product initiatives that show signs of promise but need more nurturing. Sitting at the peak are the market changers. These are the ones we dream about. The ones that will win us those seats next to Jack Nicholson at the Lakers games.
In my post, I suggested that before enterprise managers even think about building a pyramid, they need to demolish the territorial and cultural barriers that separate each of these functions. Too many organizations treat incremental development as the poor relation while giving new-product and new-technology development all the attention. And the funding.
Another consequence of this stovepipe structure is that while companies rightly look at incremental development as a response to the marketplace, they hope and expect blockbusters to come bursting out of the laboratory. It’s the mad scientist view of development.
But companies that bank on these Eureka moments confuse invention with innovation.
What happens is that they create solutions in search of problems and hope that one of those solutions will turn into a blockbuster. This kind of thinking is what accounts for average B2B product failure rates well over 70 percent and companies getting into markets they have no business being in.
But when you tear down the walls and take a closer look at the internal processes, you begin to realize that all three development activities — incremental changes, new products and breakthrough technologies — are really variations on the same theme. That theme is one of protecting and growing market share by evaluating all investment opportunities in the same way.
And the way you do that is to make product innovation a core business process that is based on data-driven criteria… spans all product activities… is bound by your company’s business objectives... is implemented using best practices… is transparent across the company... and is accountable to senior management for results.
Invention focuses on creating new technologies. Innovation focuses on deciding which ideas will bring the greatest value to your customers. One is good for the ego. The other is good for business.