Which Ideas in Product Innovation Are Most Successful?

The statistics for successful product innovation are perplexing. While only 15% of products fail completely (although many others would not be classified as being entirely successful either), half of all the resources invested in developing new products are invested in those that are destined to fail. This leaves companies with only half of their resources to invest in product development strategies that will support the other 85%.

A recent article claims that innovation is dead by illustrating a case of a failed diaper. The author sites that the diaper had better features than its competitors but was not successful, thus proving innovation is no longer valid and companies must once again compete on price. This is nonsense. This case study shows something else entirely about innovation. It shows that companies are choosing to invest their precious resources in products without doing their research first.

If you aren’t willing to take my word for it, listen to a second opinion. Capgemini Consulting issued a report citing that three quarters of the best innovators maximize their success by clear and systematic process for screening their ideas. It may be a misconception that entrepreneurs and inventors who are revered throughout history are geniuses that came up with the best ideas, while those who have failed are merely dunces.

What Makes Companies More Successful in Creating New Products?

The truth is, they are not smarter because they have better ideas. They just happen to be more successful because they are more realistic about which product innovation ideas they came up with are most likely to work. How do you screen out ideas for your business?

There are several criterion that companies need to consider:

• How Well Does it Support the Business’s Brand? – It is sometimes tempting for companies to target a product that they perceive as being highly profitable. But there have been occasions where this has seriously damaged the brand the business worked so hard to build. It is also important for companies to remember that even though a great idea may be highly profitable in theory, they may not be the best to implement it if they are already known for something else (an example of this is automobile companies known for selling economy cars trying to sell luxury lines that were not taken seriously).
• How Feasible is it to Develop? – The problem that many businesses make here is they focus on the most obvious product development milestones and neglect others. For example, almost all electronic components that are designed function as intended, but half of them do not work when they are integrated with their systems. Sometimes, the limiting factor that stops a project from working is the one that they would not have considered. A more obvious concern is that businesses underestimate the resources necessary to put the project together.
• Does the Market Support the Idea? - This should be obvious to anyone starting a business, but obviously it is not. In the diaper example above, the company did not consider what the customer really wanted.

The fact that companies are investing more of their resources in products that fail says that they are either taking too much risk that doesn’t pay off or they are not selecting their products carefully. Developing a successful product innovation strategy requires knowing when to be honest with yourself about when you came up with a poor idea and having a system to screen it out. An example of such a process can be found on the article Idea Screening in New Product Development

Last Updated (07 August 2010)