4 Steps to Company & Product Innovation

Sticking to the known best-practices and markets may be the quickest path to irrelevance when it comes to designing and building new products and mapping out corporate direction.

At least, that was the premise of Adam Hartung, managing partner of Spark Partners, a consulting firm specializing in innovation, during his presentation at the Electronic Component Industry Association (ECIA) executive meeting in Chicago this week.

“If you are irrelevant, you are a failure,” said Hartung to an audience of supply chain professionals. “When you are relevant, your customers can't wait for a sales call, they want to know your point of view.”

He pointed to one-time retail giant Sears and once market-defining Eastman Kodak as two examples of once powerful companies now waning in influence. He also offered a handful of product examples: encyclopedias, maps, and wristwatches. These once mainstream products have nearly gone the way of the dodo bird.

Avoiding the irrelevance trap takes a combination of creativity and fearlessness that challenge the average manufacturer. Fortunately, Hartung offered a four-step process for capturing success:

  1. Spend time looking at the future. Rather than planning based on past markets and customers, the key is to focus on future trends. Instead of looking at the biggest present day accounts of the organization, for example, ask where the greatest opportunity lies. Look for the thing that is different, but that makes money and gives people what they want. Think Virgin Airlines, which tossed out the hub and spoke system of traditional airlines and delivered cheap fares, along with more legroom and personal video screens for every passenger, moving the company away from its music business roots.
  2. Focus on competitors rather than customers. Consulting present customers about new directions can lead to industry lock in, Hartung warned. Newspapers, for example, listened to customers who still wanted classified ads, but failed to consider the online options like Craigslist that made their approach obsolete.
  3. Don't be afraid of being disruptive. It's tempting to stick to what you know, but sometimes you have to go in entirely new directions to succeed.”It's one thing to have the insight, but you actually have to do it,” said Hartung. If Amazon had feared being disruptive, they'd still be just an online bookseller.
  4. Create white space projects and teams.   Innovation won't happen in your spare time. You have to dedicate people to figuring out directions and solutions, Hartung emphasized. Give the team parameters (goal, budget, and timeframe), set them free, and see what happen.

This handful of guidelines provides the secret sauce of innovation success, Hartung promised. “It works every single time,” he said. “We haven't seen a single example of organization's following this pattern that don't revenue double in three to four years. When you align with the market you are the one that makes shifts happen.”

The electronics industry is facing a variety of market shifts, and the reality is that most organizations must change or die. How do you see these principals being applied in your organization? What do you think the future of the supply chain holds?

17 comments on “4 Steps to Company & Product Innovation

  1. Anand
    October 30, 2013

    A company should always expand its roots to different sectors. Virgin moved on from being a single dimensional company to a multi dimensional company. They expanded their roots and dipped their fingers in subjects like aeronautics, space travel for the ones willing to pay, real estate, mobile phones etc. While some of their projects may not have had immediate results, but it had some terrific outcomes in the future.  A CEO must always have that insight into the workings of his company, and must also be able to compete not only with other companies for the current market, but also for the future market as well.

  2. Houngbo_Hospice
    October 30, 2013

    “Consulting present customers about new directions can lead to industry lock in,”

    Most people don't know what they need until they get it and use it. Product innovation should also be about surprising customers with new features that are both elegant and userfriendly.

  3. Hailey Lynne McKeefry
    October 30, 2013

    the presenter here put up an amazing slide of Virgin's various businesses. It was pretty astounding. it seems the company is always asking “Where is there opportunity?” and then following where that leads even if it takes them into entirely new and unknown markets.

  4. Hailey Lynne McKeefry
    October 30, 2013

    @Hospice, i guess it can be said that it is more true that people like what they know rather than know what they like. I also think that customers largley want to be agreeable…adn saying something is a good idea won't necessarily in them putting thier money where their mouths are.

  5. Lavender
    October 30, 2013

    Hailey, focusing on competitors would only push more similar products into market which can not be recognized as innovation. This is why customers don't view Samsung smartphone as innovative products, at least less innovative than Apple.  

    And customers play an important role in innovation. Usually their unrealistic illusions describe direction. I like the word “Any complaint from customer is a driving force to better products”. 


  6. ahdand
    October 31, 2013

    @Hailey: Good point indeed. I think most of the people do not want to learn things from others. What they want is to highlight the facts that they know best and cover things that they do not know.        

  7. ahdand
    October 31, 2013

    @Hailey: True many do not have a specific target to aim at. They shoot whatever they see and end up in a place which does not cater to any of their needs.  

    October 31, 2013

    I liked your post but wondered about your point on focusing on competition and not customers.  The trouble with that is the lag between seeing what the competition has launched and then repsonding with one of your own.  Surely it is better to listen to your customers' problems and then create novel solutions.

  9. Hailey Lynne McKeefry
    October 31, 2013

    @Lily, when he says “focus on the competition” he didn't mean to copy them. What he meant was that you have to always know where in the pack you are and how the market is evolving. Apple created an iPad, for exmaple, and all of a sudden there was a new bar for personal computing. It didn't mean everyone else hsould make an iPad, but rather that they need to ask what need was there that wasn't being met. Then figuring out how the organization can position itself to be in the game. Customers are important,but you have to look at getting new customers, not just pleasing the old.

  10. Hailey Lynne McKeefry
    October 31, 2013

    @FlyingScott, see my last comment. It's about being aware of teh competitive landscape and the changing market.

  11. Lavender
    October 31, 2013

    Hailey, I don't mean copy, but focusing on competitors would lead to more improvement on original functions and less revolutionary innovation. 

    In addition, either old or new customers all contribute to the appear of new idea. 

  12. Ford Kanzler
    November 5, 2013

    Often the path to becoming strategically different and valuable to customers isn't about a product innovation. Distribution (think Costco) , pricing (think Zipcar), sales (consider Tesla Motors) as well as design and manufacturing can lead to competitive advantages.

    Yes. Definitely keep and eye on competitors. Copying them no. Learn from and take advantage of their errors, yes. Customer MAY be a source of ideas for change, or not. Some successful companies don't wait for their customers to discover or ask for what's next. Think Apple. This is an area of business that's truly creative. Doing it the same way isn't.

  13. Hailey Lynne McKeefry
    November 12, 2013

    @Lily, that's certainly one possibility. Another is watching the competition and seeing where they are leaving a whole or not satisfying or listening to customers. I think the Virgin Air example is great example of that–he found himself hating his flying experience and deciding to build a company that really made the experience good for customers.

  14. Hailey Lynne McKeefry
    November 12, 2013

    @Ford, thank you for saying it so well! that was exactly where i am getting at. I'll add to your list of companies to learn from : Disney for customer service, and Zappos for supply chain management.

  15. Ford Kanzler
    November 12, 2013

    Focusing on competitors doesn't mean copying them. It can also allow a company to see what its competitors are NOT doing that customers want or need. What's missing? It can show you a means of differentiating your brand in your prospects' minds. Copying isn't recommended. However, ignore competitors at your peril.

  16. Hailey Lynne McKeefry
    November 12, 2013

    @Ford, yes, at least in the supply chain and electronics industry imitation is NOT the sincerest form of flattery…or maybe it is, but incredibly costly.

  17. itguyphil
    November 12, 2013

    “…but incredibly costly”

    Only if you get caught in certain scenarios. Unfortunately, it may well pay off in the short term for many imitators.

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