Serial Innovators: How Individuals Create and Deliver Breakthrough Innovations in Mature Firms
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In this pioneering study, authors Abbie Griffin, Raymond L. Price, and Bruce A. Vojak detail who these serial innovators are and how they develop novel products, ranging from salt-free seasonings to improved electronics in companies such as Alberto Culver, Hewlett-Packard, and Procter & Gamble. Based on interviews with over 50 serial innovators and an even larger pool of their co-workers, managers and human resources teams, the authors reveal key insights about how to better understand, emulate, enable, support, and manage these unique and important individuals for long-term corporate success. Interestingly, the book finds that serial innovators are instrumental both in cases where firms are aware of clear market demands, and in scenarios when companies take risks on new investments, creating a consumer need.
For over 25 years, research on innovation has taken the perspective that new product development can be managed like any other (complex) process of the firm. While a highly structured and closely supervised approach is helpful in creating incremental innovations, this book finds that it is not conducive to creating breakthrough innovations. The text argues that the drive to routinize innovation has gone too far; in fact, so far as to limit many mature firms' ability to create breakthrough innovations. In today's economy, with the future of so many large firms on the line, this book is a clarion call to businesses to rethink how to nurture and thrive on their innovative workforce.
ISBN-13: 9780804775977
Media Type: Hardcover
Publisher: Stanford University Press
Publication Date: 05-30-2012
Pages: 240
Product Dimensions: 6.30(w) x 9.00(h) x 1.10(d)
Dr. Abbie Griffin holds the Royal L. Garff Presidential Chair in Marketing at the University of Utah's David Eccles School of Business. A former editor of the Journal of Product Innovation Management, Griffin's research investigates how to measure and improve the process of new product development. Raymond L. Price holds the William H. Severns Chair of Human Behavior in the College of Engineering at the University of Illinois at Urbana-Champaign and is the Co-Director of the Illinois Foundry for Innovation in Engineering Education. He has held management positions at Allergan, Boeing, and Hewlett-Packard. Price is co-author of The HP Phenomenon: Innovation and Business Transformation. Bruce A. Vojak is Associate Dean for Administration in the College of Engineering at the University of Illinois at Urbana-Champaign and Adjunct Professor of Electrical and Computer Engineering and of Industrial and Enterprise Systems Engineering. He has held positions at the M.I.T. Lincoln Laboratory, Amoco Corporation, and Motorola. Vojak serves on the Board of Directors of Midtronics, Inc.
This chapter describes the • Different types of innovations firms need to commercialize to both support their ongoing businesses and grow their firms into new market space; • General processes by which both incremental and breakthrough innovations most typically are developed, and why creating successful breakthrough innovations is so difficult; • Different tasks that people in various innovation roles perform; • Positioning of the Serial innovator model of innovation vis-à-vis the technology push and market pull models; and • General structure and components of the MP5 Model of Serial innovators and how they innovate, which drives the structure of the rest of this book. Firms need to support two types of innovation to stay competitive and in business. They need incremental innovation that provides ongoing improvements to current products and product lines. However, they also need breakthrough or radical innovation that produces enormous performance increases in current products (e.g., a fivefold or more increase in the performance of current features or at least a 30% decrease in cost to produce) or results in innovative products that move the firm into new white space by providing an entirely new set of performance features (Liefer et al. 2000). These two types of innovation need different development processes. INNOVATING TO SUPPORT THE ONGOING BUSINESS The majority of the firm's development efforts, over three-fourths of the total number of projects undertaken (Barczak et al. 2009), are spent improving the performance of products currently marketed or adding new products to current product lines. These projects tend to improve or change product performance incrementally. Typical product improvement efforts for a diesel engine manufacturer might be a new engine with increased fuel efficiency or decreased emissions. other examples of product improvements include faster computer chips, smaller and lighter laptops, easier to operate software, softer bread, and creamier ice cream. While significant engineering or development effort may be required to achieve these goals, the desired outcomes are rather predictable and to consumers appear evolutionary in nature. These projects are necessary to retain customers over time, providing them with reasons to repurchase from your firm, rather than from your competitors. Firms that do not continue to renew and improve their current products stagnate and lose customers to competitors. The U.S. car industry's failure to evolve and to upgrade their small car offerings has contributed significantly to their demise, as Kia, Hyundai, and even BMW (Mini) and Smart have materially encroached into this segment of the U.S. And global automobile market. Developing products that expand a current product line allows firms to increase usage with current customers. For consumers who value variety, larger product lines may mean increased absolute consumption. If, for example, Abbie kept only two varieties of granola bars in the pantry, her son might have a granola bar for a snack after school two or three days a week, substituting some other snack on the other days. However, if the cupboard held six or seven different granola bar flavors, he might choose granola bars as his after-school snack four or five days a week, increasing his absolute consumption of granola bars, at the expense of another snack food. Variety-seeking is a major reason why grocery stores have one full aisle of ready-to-eat cereal, and why some closets contain forty to fifty pairs of shoes. Extending a current product line also may attract new customers, whose tastes or needs differ somewhat from those satisfied by current offerings. When yogurt manufacturers expanded from fruit-flavored yogurts to chocolate flavors, their targets were chocoholics who previously had not been yogurt consumers because they were not fruit fans. Similarly, the primary users of Palm's PDas traditionally were professionals until the company's Zire line extension specifically targeted the broader market of students and nonprofessionals. While the Zire used the same operating system and had a similar look and feel, it was less expensive than the professional Palm and was differentiated from the rest of the line by simplicity: it had a monochrome screen without backlighting, only two quick buttons instead of four, and a traditional up/down navigation button instead of a five-way navigator. Developing line extensions involves slightly greater effort and risk than developing incremental improvements to current products. Such changes require more research into customer needs, for example. Even still, the development effort is predominantly evolutionary and predictable. Given this predictability, the probability of success can be maximized by implementing formal product development processes. Indeed, over the last twenty-five years, academics and practitioners have made great strides in understanding how to manage these projects more effectively and efficiently, and in developing formal processes for doing so. These formal processes, such as the Stage-Gate® process illustrated in Figure 1.1, ensure that none of the details necessary for successful development are overlooked, specify who is responsible for completing which tasks, and provide a road map for when various milestones should be achieved. Currently, the majority of companies have implemented some sort of formal new product development (NPD) process, allowing them to commercialize successful product improvements and line extensions more routinely (Barczak et al. 2009). MOVING FIRMS INTO NEW COMPETITIVE SPACE Fewer than one-fourth of the firm's innovation projects focus on goods and services that will move the firm into new competitive space. Most of those projects (60% of the 25%, or 15% of all of the projects a firm undertakes) are products that another firm already has commercialized. For example, should Ford Motor Company develop a theme park featuring cars and automotive history, this type of product would move the company into new market space. However, the product is one that other firms, notably Disney, already have developed. Thus, while this development is more risky for Ford than creating a next-generation improvement to one of their current car models, there are examples in the market that Ford could use as templates to reduce its commercialization risk. The other 40% of projects that will move a firm into new market space (approximately 10% of all of the projects the firm undertakes) are concepts that are "new-to-the-world." They are breakthrough products for which there are no competitors already in the market. The original PalmPilot®, HP's logic analyzer, and Mrs. Dash® all are examples of breakthrough products. Firms have no starting template from which to create these products and bring them to market; these projects require overcoming high market and technical unknowns, uncertainties, and risks. CREATING BREAKTHROUGH INNOVATION The typical Stage-Gate process, which works so well for incremental innovation where there are few market or technical uncertainties, does not work well for creating breakthrough products. These processes are deficient in two ways. First, the formal NPD processes used in firms assume that the product is conceptualized already and that the technology development is more or less complete. Second, they assume that projects have been approved and accepted by management for development. Stage-Gate types of processes are not helpful in navigating through the "Fuzzy Front End" (FFE) of innovation or in obtaining initial corporate approval and funding for a project. Formal innovation processes are applicable only once technical invention is demonstrated and the project is accepted by the firm for development (Figure 1.1). The FFE is the "messy, getting started" phase of product development (Smith and Reinertsen 1992). In the FFE, customer problems are understood in great depth, potential solutions to those problems are conceived, and the technologies necessary to turn those potential solutions into concrete products are found or invented. Incremental innovations have little or no FFE. Project teams are executing product improvements against well-known customer needs. For line extensions, only a minimal amount of effort is needed to understand customer needs, which is easily incorporated into the beginning of the formal development process. Even for products that are new to the firm, but already are commercialized by others, the FFE is fairly easy to complete by drawing on extant knowledge about the competitors' products and the customers and markets served. The FFE requires expending a significant effort for breakthrough innovation projects because the firm is entering unknown markets and technologies. Creating breakthrough products requires an in-depth understanding of a broad (and most likely complex) set of unsolved problems for some target market—and perhaps for a target market for which the firm has little extant knowledge. Then, somehow, those needs must be connected to some potential solution, which then must be invented in a process that frequently is reminiscent of the cartoon in Figure 1.2. No formal process has been developed to help innovation teams routinely and successfully navigate the FFE for breakthrough innovation projects. Indeed, some suggest that the term processes is not appropriate for describing what happens in the FFE because "process" denotes structure, whereas the FFE is inherently chaotic and nonlinear (Koen et al. 2002). Indeed, a multicompany project team investigating this issue, consisting of members of the industrial research institute and facilitated by an academic researcher, has proposed a circular "engine" for managing the FFE, with ideas flowing, circulating, and iterating across five elements: opportunity identification, opportunity analysis, idea generation and enrichment, idea selection, and concept selection (iriweb .org/). This FFE engine starts with opportunity identification—locating a new market or technology arena the firm wants to enter—which is driven by the firm's business goals. Breakthrough projects frequently are initiated as "technology push" endeavors. That is, they start out in the firm's research and development (R&D) laboratory. Creating significant breakthrough products from technology push initiatives is very difficult. Only half (six of twelve) of the technology push inventions studied for over a decade by the Rensselaer Radical Innovation Project resulted in a new product commercialized from the technology developed (Liefer et al. 2000). Additionally, many of the products that were commercialized did not result in the significant revenue and profit stream for the firm that was expected at their initiation. In a similar pattern, Michael Valocchi, head of IBM's Smarter Planet research initiative, expects that only about half of the initiative's FOAK, or "first of a kind," projects will result in a commercially developed product for the company—even though IBM is developing new capabilities that are targeted to particular, well-recognized global problems (e.g., how to quickly pinpoint where an outage has originated on a utility's electrical grid). IBM invested $1.8 billion in this type of long-term research in 2009, with fifty smart-grid research projects under way (O'Brien 2009). In other words, even for companies that are very good at inventing new technologies, achieving commercial success from those technologies can be difficult. Firms frequently fail in commercializing breakthrough innovations based on technology push strategies for two very different reasons. First, many technology push initiatives produce "a hammer that is looking for a nail"—a technology that does not provide any immediate profit for the company because no viable commercial applications have been identified. Typical of these projects is the DuPont Biomax® story (for a more complete recounting, see Liefer et al. 2000, 12–16). In the late 1980s, DuPont's executives commanded the scientists in their R&D laboratories to "invent their way out" of the company's financial woes. As a result, one of the materials invented in 1989 was Biomax, a "biodegradable" polyester-based material that would function as designed for some specified period of time and conditions, and then would decompose and could be recycled. By 1992, with no sales, "Biomax seemed destined to sit on the shelf—one of many good ideas developed by DuPont scientists for which no market application could be found" (Liefer et al. 2000, 14). over the next four years, business development managers still were unable to find commercial applications for this material, but the company persisted, believing that the invention was still potentially valuable. Biomax products still can be purchased from DuPont (www2.dupont.com/ Biomax/en_US/); however, the initially expected large sales volumes and high returns have never materialized. The financial benefits of this project have been incommensurate with the investment. Second, many breakthrough innovations that originate out of the technology organization do not get commercialized because they cannot cross the so-called "Valley of Death" (Markham 2002). The Valley of Death is the gap between the firm's personnel and organizational structures that are in place for technology development, and those resources and structures that are in place for commercialization activities. Commercialization resources include marketing, sales promotion, production, and distribution. Because the resources necessary for commercializing new products differ from those technical resources needed for inventing new technologies, and because they are disconnected from those resources, even the most important breakthrough inventions may fall into the Valley of Death and fail to be commercialized. Although many breakthrough innovations start out as technology push endeavors, some breakthrough products are market-driven in their origin. Pert Plus® is one such example. As women flocked to the workforce in the 1970s, Procter & Gamble's (P&G) marketing people heard over and over again that there was a need for a shampoo that both cleaned hair and simultaneously conditioned it. A "2-in-1" hair product would decrease the number of bottles that had to be packed for travel or use at the gym, and decrease the overall amount of time needed for hair washing/ conditioning. In this case, the market needs were well defined, but the technical goal was difficult to achieve. Overall, it took ten years to invent the technology; the project was pursued diligently for a period of time, was shelved as one or another technical pathway failed, and was pursued again later by other technologists who were inspired to tackle the problem. Finally, technical success was achieved by radically changing the surfactant system from the usual anionic system in shampoos and conditioners to a silicone-based system. Pert Plus, the resulting product, was an immediate market success and is still creating profits for the company decades later in the very competitive shampoo category. Thus, while technology push endeavors may fail because the invention either does not sufficiently solve an important customer or market problem or because there is no organizational structure or mechanism in place to move it from the technology group into acceptance for development, market-driven breakthrough innovation endeavors may fail because there just is no technology that can solve that particular problem. Wouldn't you just love to avoid traveling by airplane by being materialized from one point to another, à la "Beam me up, Scotty," in Star Trek? In summary, breakthrough products that are potentially important to a firm can originate using either a technology push or market-driven endeavor. Both types of endeavor are essential for long-term success. However, creating successful breakthrough products is difficult, independent of whether the process begins as a technology push or as market-need-driven. We do not always have the requisite technologies available to solve a particular problem. Inventing technical solutions that actually solve a problem can be prohibitively time-consuming, if those solutions can be found at all. On the other hand, it can be similarly difficult to identify a significant problem that a particular technology solves after the fact. There is no standard process for achieving the most important tasks needed to complete the FFE—to match good technical solutions to problems that are significant and important to potential customers. Creating breakthrough products can be even more difficult in large, mature firms because of the specialization of labor into the different tasks of innovation and development, as seen in the Valley of Death problem. (Continues...) Read an Excerpt
SERIAL INNOVATORS
How Individuals Create and Deliver Breakthrough Innovations in Mature Firms
By Abbie Griffin Raymond L. Price Bruce A. Vojak
Stanford University Press
Copyright © 2012 Board of Trustees of the Leland Stanford Junior University
All right reserved.
ISBN: 978-0-8047-7597-7
Chapter One
BREAKTHROUGH INNOVATION IN MATURE FIRMS
Excerpted from SERIAL INNOVATORS by Abbie Griffin Raymond L. Price Bruce A. Vojak Copyright © 2012 by Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of Stanford University Press. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Contents
Preface and Acknowledgments....................ix
Introduction: Serial Innovators and Why They Matter....................1
1 Breakthrough innovation in Mature Firms....................14
2 The Processes by Which Serial Innovators Innovate....................36
3 Customer Engagement for Breakthrough Innovation....................70
4 Navigating the Politics of Breakthrough Innovation....................89
5 Characteristics of Serial Innovators....................112
6 Identifying and Developing Serial Innovators....................135
7 Managing Serial Innovators for Impact....................152
8 Love Letters to Our Customers: Serial Innovators, Aspiring Serial Innovators, and All Those with and for Whom They Work....................183
Appendix: Interview Suggestions for Identifying Potential Serial Innovators....................203
References....................209
Index....................213
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