3 Reasons Innovative Products Fail

March 10, 2014

Last week Barcelona was the place to be with both the colossal Mobile World Congress and the much more targeted Breakthrough Innovations (BI) conference. BI was focused on innovative product development with product leaders from a range of industries, including telecom to consumer products to medical devices.

These conferences were the reasons I was in Barcelona… and not because it was -10° in Chicago.  

Sourcing knowledge, technologies, and customer insights from outside the firm and non-traditional sources became a given part of the approach to innovation success. There were great stories from Nestle, Johnson & Johnson, Volvo, and others about their innovation success in co-development programs that involved customers early in the design process.

Yet, the more powerful learnings were hidden between the Powerpoint headlines and cocktail hour discussions. Innovative products and innovation success demonstrated a repeated pattern of avoiding these three innovation pitfalls.

1.         Stage-gating prematurely kills future category leaders.

Nespresso and Johnson & Johnson’s Baby Shampoo today are iconic, profitable brands. But, both lost money for 10+ years after launch. TEN YEARS! Notably, these products were launched before stage-gating was even a management concept. Were it not for “true believers” in senior management, these products could have been stopped along the way. That would be the “rational” thing to do, right?

2.         Corporate venturing expands your blind spot.

Corporate venturing is usually a reaction to the realization that disruptive technologies emerge from corporate blind spots. Big telecom could have launched Skype, Webex, and Whatsapp only at the risk of cannibalizing some existing business line. Companies often launch corporate venture programs designed with ongoing input and connections to existing product teams, leveraging the “market expertise and know-how of the company”.

That approach creates a blind spot, an inability for the company to see the larger opportunity beyond this year’s existing product sales. Deutsche Telekom’s HUB:RAUM incubator and others demonstrated that innovation success in corporate venturing successes requires a holistic break from the parent company: a totally separate entity not subject to business decisions the product managers face.

3.         Developing great technology at an affordable price is often second best.

Flexibility often matters more. Innovative products leverage R&D and marketing know-how of the company with a development plan focused on building technology that attacks a need. But, the problem framing is often incorrect. Customers aren’t “buying technology”. They’re buying a solution that can depend on regardless of the circumstances they find themselves in.

Johnson & Johnson’s medical devices group presents a cogent case on the development of a device for treating hernias in the Chinese market, which in fact is being introduced this year in the European market first. By involving a wide range of surgeons, both rural and urban ranging from highly skilled to less trained, the company was able to design products that were optimized for the range of conditions a surgeon might find him- or herself in. Case studies discovered numerous surgeons who could afford and capable of using state-of-the-art solutions, but whom relied on second best solutions that could reliably be used repeatedly in a variety of circumstances.

I’ve experienced a similar story in Malaysia: a successful start-up that developed flexible surgical beds to manage a wide range of conditions a doctor might face in- and outside the hospital. It wasn’t the most technical solution at the lowest price in many scenarios of use for the doctors, but best alternative to stick with throughout a range of possible environments.



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