Let’s be clear. Innovation is some of what you launch. The more risky bits. Not the incremental changes: new count, new packaging, extra razor blade, tweaked formulation, new claim… Productive innovation is what adds value to the market by identifying and successfully satisfying previously unmet consumer need.
3M’s President and CEO, Unge Thulin, has projected that as much as 40% of the corporation’s 2017 revenues will come from products launched within the last five years (bizjournals.com). With 30% the benchmark for ‘innovative’ status, 3M’s innovation credentials are well established, and all the more remarkable given the high rates of failure for new product launches. New product failure rates differ across industry sectors, but the Product Development Management Association estimates 49% in consumer products and 35% in healthcare.
To successfully develop new products, we must clearly identify unmet consumer need and then meet it: sound simple? To determine what that need is today is hard enough. To accurately predict what it will be is more complicated still.
Design Thinking principles start with consumer need. It asks you to test what will fail or succeed, and to do it fast and cheap. But still failure rates don’t improve. A dichotomy indeed.
Should we ask our innovation teams to continue to focus on meeting the immediate business need – usually short term – or do we do something different – risky, even – and improve the probability of commercial success? Well, risk is relative. A decision based on an informed belief is not a risk. It’s a calculated plan – where, let’s remember, the win can be 40% of revenue from new products.
Insight provides foresight. Different insight can reveal new opportunities and new success criteria, or rather criteria against which new ideas can be differently measured. It’s not a risk, it’s an imperative.
Future thinking. Future proofing. Innovation justified.