What’s new in Innovation?

20 07 2010

R&D reaches out; the rest of the world reaches in

1.         The big buzz-words of the moment are Open Innovation (Chesbrough) and Value Innovation: (including Kim and Mauborgne’s concept of Blue Ocean Strategy). We can take these – especially the former – for granted as major new direction for innovation. Interestingly however, both of them – and many other recent developments too – point to a new challenge and opportunity: the broadening role of what we used to call R&D departments. As products proliferate and the competitive landscape becomes more and more congested people are recognising afresh the old truth that new products (as opposed to incremental improvements) often demand not just new marketing but new or altered business models. Apple is at the forefront here with the i-pod / i-tunes combination and the use of third party “apps” with the i-phone. These innovations are not technical, nor marketing, nor yet design but an amalgam of all three.

The co-development of products and business models is the force behind the growth of “Corporate Venturing” where large companies float off smaller ones explicitly to exploit ideas using business models that the company cannot itself apply. Often these spin-offs are reabsorbed when they have clarified both the worth of the idea and the best market and business model for extracting value from it.

Technical staff are increasingly expected to participate in market research. Understanding Hidden Needs is often seen as a task for the product designer as much as for the marketeer

These changes will demand a a new flexibility in companies to operate a variety of business model; and moreovera new breed of manager who can move easily between technology, marketing and business strategy. Easier said than done! Where will these people come from? How can they be trained? What is their career progression? Indeed what is the professional and logical framework in which they will work?

Posted by Rick Mitchell

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