PDMA Body of Knowledge: Product Innovation Process Insights #1
Read time: 8 minutes
The kHUB Curator Team members have each been assigned a BoK section to own. This includes seeking, editing and sharing content related to that section. The curators are also sharing their perspective of various sub-sections of their chapter and contributing personal examples, experience, or related articles corresponding to the subject matter.
Innovation Process for Radically New Products
This article concerns the chapter on Product Innovation; more specifically the section 3.1.2 –that talks about Product Innovation as a ‘risk versus reward’ process. The article aims to explain the differences in the innovation process followed between incremental new products and radical new products.
When Sony launched the Walkman, it revolutionised the music industry. People thought that it would probably be the biggest breakthrough ever in that category until Apple came up with the iPod. Similarly, take the case of the landline phone versus the cell phone. The latter was a clear discontinuous departure from the former in many ways - form, content, flexibility and pricing.
Such discontinuous product innovations result in what we call ‘radically new products’. These redefine the way we use the category itself and invent new rules of usage and related transactions. How do companies go about developing these new radically new products? Do they adopt different processes from those used for incremental innovations or more traditional new products?
The answer is yes. Organisations adopt a very different approach when it comes to ideating and developing radically new products. Let us examine some of these differences.
First of all, consider the overall process. While the traditional Stage GateÒ NPD process may not be applicable for the radically new products, there is still some formal process involved here i.e. they are not accidental or ad hoc. However, it is different for each disruptive product and hence one cannot standardise it into one typical process for discontinuous innovations.
Secondly, organisational culture also plays a very significant part in developing radically new products. For something discontinuous to emerge, there must be considerable risk appetite and tolerance to failure. Furthermore, resource availability for radical products development needs to be generous, as these are new concepts that require intense consumer communication. So the product innovation process needs to accommodate all of these aspects.
Thirdly, the amount of customer involvement in the new product process. Is a critical factor. While incremental innovations may have a heavy dose of input from customers, the radical ones seem to rely more on in-house R & D teams or experts. This is because they are probably proactive in their developmental efforts and do not expect the customers to be aware of their own latent needs. Radical products tend to lead the consumers and not the other way round.
Fourthly the methodology of the new product development process is considered. Incremental innovations use more structured and quantitative processes, whereas radical ones use more exploratory methods. The latter is dealing with a lot of unknowns, both from the product development angle as well as from the customer angle. They are probably groping in the dark as to who to target, how to target, what to exactly offer etc. And these questions are best answered in the initial stages through exploratory research.
Finally, concerning new product measurement metrics, there are few prior benchmarks for radically new products. Since by definition, these involve those new products that are pioneers in their categories, it is difficult to arrive at ways of evaluating their performance from a market stand point. So metrics are more restricted to customer acceptance at testing stages and cost and timeliness of development. However, in incremental products, there are existing norms in the categories that can serve as a comparison. Therefore it is possible to assess their performance against them.
To sum up, radical innovations are different from incremental ones and must be managed accordingly. The organisation needs to be sensitive to have different processes and metrics for evaluation. The ride may be turbulent and unpredictable but the success of these, when they happen, has the potential to rewrite the future of an organisation.
About the Author
Dr. K Rajeshwari brings to the table a unique higher combination of academic excellence, a long experience with top corporates, teaching stints at various IIMs/XLRI in the country, conducting Management development programs for India’s leading organisations as well as a strong publication record.
She has a total of 26 years of experience, a significant part of it in New product development. She is a solo author of a B School reference text book titled ‘New Product development- a FMCG Perspective’- based on her PhD thesis. She is currently a faculty member at Great Lakes Institute of Management. Prior to this, she completed her Ph.D from IIT Madras and served as a faculty member at XLRI, Jamshedpur. She has completed her post graduation from IIM Ahmedabad in 1994 and is a visiting faculty at various IIMs in the country.
Rajeshwari has authored three books (two-solo) - the first one was titled ‘My Life My Choice’-published by Macmillan in 2011 and was about mid-life career choices. The second one was a reference text book for B Schools and was titled ‘New Product development-a FMCG Perspective’, released in 2017. The third one is a recently launched one titled ‘The New Plan A’- and focuses on the various mid-life career challenges faced by working women. She recently won the Best Paper Award at an International Research Conference in Boston in 2017. She is also the recipient of numerous other Awards- Women Achiever and Distinguished Management Awards.
Rajeshwari has been a part of several professional organisations such as CII Task force for entrepreneurship, American Marketing Association, Institute of Research Bureau, Product development Management Association, IIM Ahmedabad Executive Committee, Empowering Women in IT industry etc.