Product Innovation and Technology Strategy

By Cooper, Robert G. | Research-Technology Management, January/February 2000 | Go to article overview

Product Innovation and Technology Strategy


Cooper, Robert G., Research-Technology Management


Three elements must be in place and working harmoniously in order to improve new product development.

We live in turbulent times. Technology advances at an ever-increasing pace; customer and market needs are constantly changing; competition moves with lightning speed; and globalization brings new players and opportunities into the game. More than ever, businesses need a product innovation and technology strategy to help chart the way. (For short, call this strategy PITS). The trouble is, most companies lack much in the way of an effective PITS, and worse yet, seem at a loss when faced with developing such a strategy.

Undertaking product innovation without a strategy is like running a war without a military strategy. There's no rudder, there's no direction, and the results are often highly unsatisfactory. You simply drift. A business without a PITS will inevitably lead to a number of ad hoc project decisions made independently of one another. The result is that the business dissipates its development resources across a number of initiatives that are not strategically important, or worse yet, finds itself in unrelated or unwanted markets, products and technologies; there is no focus (1).

Three Cornerstones

Our benchmarking study of 160 businesses found three cornerstones of high-performing businesses when it came to new product results (2,3):

1. Having a new product process that works-a template or tactical road map to drive new product projects to market quickly and successfully.

2. Resources-having the right resources and sufficient resources devoted to product innovation.

3. Having a new product and technology strategy for the business.

The first two are well-known. But the third-having a product innovation and technology strategy for your business-was too often missing in the majority of businesses. Indeed, businesses in this study achieved mediocre scores on average when it came to having clear goals, defined arenas of strategic focus, and a long-term thrust for their new product efforts (2).

Two Ways To Win

There are two fundamental ways to win at product innovation. The first is doing projects right; the second is doing the right projects (4). Here's what I mean:

Doing projects right.-Research over the last 20 years has uncovered myriad success factors at the project level (5). For example, employing true cross-functional teams, doing the up-front homework prior to the development stage, building in the voice of the customer, and getting sharp, early, and stable product definition, have all been found to impact positively on new product outcomes.

Doing the right projects.-Equally important, but often missed in traditional research, is the issue of doing the right projects. As one executive put it: "Even a blind man can get rich in a goldmine by swinging a pick-axe; it's not so much how you mine-the trick is picking the right mine!" The implication is that project selection (doing the right projects) as well as project execution (doing projects right) are the keys to success.

The emphasis in the 1990s has been on doing projects right-on the process of innovation. Research has revealed about 10-12 major success factors that have to do with things the project team does (or too often does not do). As a result, many companies have turned to new product processes as the answer. According to the PDMA's latest best practices study, "Nearly 60 percent of the firms surveyed use some form of Stage-Gate(TM) process" (6). The hope is that by defining a roadmap from idea to launch, project teams will build in these success factors by design rather than by chance.

Picking the Right Projects

Results from such new product processes have not always been as positive as had been hoped, however. Why not? Perhaps it's because the focus has been on the wrong projects or maybe too many projects. In fact, our benchmarking study reveals that project selection and project prioritization are the weakest areas of new product management (2). …

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