Achieving Superior Differentiation, Speed to Market, and Increased Profitability

Volume 19, Number 3 Article by S S Pal September, 2007

Fast Innovation: Achieving Superior Differentiation, Speed to Market, and Increased Profitability : By Michael L George, James Works, and Kimberly Watson-Hemphill, McGraw-Hill, 2005, :

Organised businesses are on the look out for more efficient means of innovation like never before. Technology upheavals are occurring at break-neck speed in most industrial sectors worldwide. Product life cycles are shortening. CEOs everywhere are concerned over why innovations happen so much at one place, and not so much at another. The authors of this book have taken it upon themselves to address such concerns. The subject being far from new, the authors’ justification of this title in the milieu of available innovation reads is based on its value addition as also the fact that it integrates new knowledge that has emerged only in the past few years, especially in terms of being better, cheaper and faster simultaneously. Fast Innovation professes to innovatively apply several of the existing principles to achieve ‘differentiation’, ‘fast time-to-market’, and ‘disruptive innovation’, and promises to help you ‘reduce your lead time 50-80 %’.

Of the foundational arguments, based upon available queuing theory results, the authors’ principal rules for overpowering the slow innovation regime are, first, minimising the number of innovation tasks-in-process at a particular time, and second (perhaps counter-intuitively), reducing task-time variations by lowering the capacity utilisation of the innovation resources, while making appropriate capacity reinforcements at the bottleneck stations. Re-use of selective product elements developed earlier in a new effort, emerges as a distinct focus area in the book for speeding up the innovation process. The authors’ procedures to also selectively re-use the improved knowledge already existing elsewhere, such as open innovation, queue concepts, stage-gate process, customer engagement, executive leadership, designating champions, team structuring, project management, operations improvement and business model re-visioning, with individual applicability considerations for exploiting these in accelerating the innovation tasks on hand, can be seen as one very practical approach to achieving the goal. Practitioners reading this book will relate to this approach with ease. The authors’ approach to these issues is one of triangulation – building on the selected technical means by strengthening the corporate medium on one side, working on the mode of project deployment on a second, and providing several prescriptive propositions and materials in support. The three-dimensional approach, covering the dimensions of ‘New product/service innovation’, ‘Market definition innovation’, and ‘Process/business model innovation’ is the recommended strategy for making innovations happen.

Of these, although such a classification appears useful, the explanations for the market definition dimension reveal some missing links. Along the dimension of new product/service innovation, the perspective becomes outward in order to address the customer requirements; along that of process/business model innovation, the issues relate to the denominator of productivity. Both these tracks are essentially collinear, and any other dimension to distinguish itself should, therefore, be perpendicular to it. The authors’ proposition for the remaining third dimension of market definition ‘reflects (1) the leverage…with customers…by offering additional products and services that surround existing offerings, or (2) finding entirely new market segment for existing offerings’ (p 75). These two elements both being on the same plane, this view of the market definition seems to neglect the fourth ‘new-product-new-customer’ quadrant of the same and innovative versions on the product-by-customer matrix. This view at best encompasses the second dimension, and at worst remains entrenched in the Schumpeterian ‘static circular flow equilibrium’. Both would be detrimental to the ‘organic growth’ proposition of the organisation, and thereby to enhancement of shareholder value, which are taken as the basal perspectives of the model.

In this regard, the inclusion of new markets for innovated versioning on the same platform, segmenting the vertical scale of the entire market spectrum from the base of the pyramid to the premium top-end, could prove to be a proper third dimension for a more rewarding innovation outlook. The authors would probably have been better able to achieve both depth and breadth by taking recourse to the prior knowledge available on quantified performance learning of the excellence-experience regime, as distinguished from the book’s subjective ideas of ‘rapid learning’ on project performances, or to the classical (time-) learning curve concept of volume-experience outlook. Additionally, the authors’ dwelling on aspects like ethnography, Voice-of-Customer analysis, FastGate decision process and project selection. could be considered partial approaches, when they are not linked to, and indeed not taken to cascade from, the overall business ecosystem specifics of the incumbents. The dynamic appraisal workout for the innovators must independently factor in the larger business ecospheric forces affecting its inhabitants.

For innovations to be quicker and more successful as reinforcement of the organic growth pursuits, a well marshalled approach held essential by the authors, they suggest a new step for organisations henceforth – to instal an exclusive leader, a Chief Innovation Officer, as the nodal championing agency for the innovation process. With such extra dispensation in the organisation, the desired results would become far easier to achieve. While the authors are not the first in exploiting the speed value of the several inducted approaches, their ‘Fast’ methodology on the whole does appear to be the first in providing a more cogent mix than the sum of the conjoined parts would provide when used individually, and represents a superior maximiser of organisational utility in accelerating innovation.

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