Three Strategies for Effective Innovation
Manufacturers that want to improve their product development process must be market readers, need seekers or technology drivers. According to Barry Jaruzelski, vice president of Booz Allen Hamilton Inc. (New York), companies should adopt one of the following three strategies for effective innovation.
- Market Readers. Watch their markets carefully, but prefer to maintain a more cautious approach, focusing largely on driving value through incremental change. For example, Plantronics Inc. (Santa Cruz, CA), a maker of headsets and other audio equipment, closely follows technological and user trends in both the commercial and consumer market. The company creates strategic partnerships with its major corporate customers and relies on a set of strategic filters, such as potential return of investment and sales forecasts, to determine what products to bring to market.
- Need Seekers. Actively engage current and potential customers to shape new products, services and processes, and strive to be first-to-market with those products. For instance, the DeWalt division of Black & Decker Corp. (Towson, MD) stresses engagement with customers. The company grew its U.S. power tools business from $150 million to more than $2 billion, increasing market share from the teens to 50 percent. DeWalt’s engineers and marketing product managers regularly visit homebuilding job sites to study building trends and their impact on the company’s products.
- Technology Drivers. Generate product ideas by deploying their technological skill and relying on unarticulated customer needs for product inspiration, rather than following the market or direct customer input, to drive both breakthrough innovation and incremental change. For example, Siemens AG (Munich, Germany) aligns its long-term innovation portfolio around certain megatrends, such as the rise of personalized healthcare.