6. innovation & npd

8/9/2019 6. Innovation & NPD

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Managing Innovation and

New Industrial Product Development


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Derivation of Sales & Profits

Many firms derive their sales and profits from recently

introduced products.

From products commercialized within the last 5 years, best-

practice firms:

generate 48% of sales

generate 45% of profits

Risk, Reward & Failure

But, the risksof product innovation are high, significant

investment is required, and the likelihood of failure is high.

However, due to

Shorter product life cycles

Accelerating technological advances,

Speed & Agility is central to success.

James Quinn asserts:Innovation tends to be:

Individually motivated

Opportunistic

Customer Responsive

Non-linear

Interactive


3/5

However, somenew-product-development is an outgrowth of deliberate

(NPD) strategies.

Innovations Start Out Chaotic!

Generally, innovations start out chaotic.

As a project (product development) progresses and as the

costs go up, more formal planning and controls come in.

Still, flexibility must be inherent in the project.

There are two broad categories of strategic behavior:

Induced

Autonomous

1. Induced Strategic Behavior

Most large companies employ induced strategic behavior.

This is a planned form of influence upon the workforceto come up

with innovative thinking around (say) their present product line for

their customary markets.


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2. Autonomous Strategic Behavior

Large resource-rich companies employ autonomous strategic activities.

This is a situation where employees are allowed to think creatively about

innovation outside of their present products. They can think about products

that theyd like to create.

This approach often employs a product or project champion who is also

referred to as an intrepreneur

Some famous product champions:

Art Fry >> Post-it at 3M

P D Estridge >> the personal computer at IBM

Stephanie L Kwolek >> bullet proof material, Kevlar at DuPont

Product Champion

Product Champion is one who

Creates, defines or adopts an idea for innovation

Willingly assumes significant risk (loss of prestige & even their job)

to successfully implement the innovation.

A product champion is an individual who:

Takes on a central role in sensing a marketing opportunity

Mobilizes an informal network to assess the opportunities via their:

Technical feasibility

Financial opportunity

Is willing to take on risk (reputation) to bring the project to light


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Championing a Product @ 3MSenior management at 3M Company will not commit to a project

unless a Product Championemerges and will not abandon the effort unless

the champion gets tired.

6. innovation & npd

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