Product Development Innovation

The business’ culture will often decide what opportunities are exploited and which ones are ignored. Business culture also influences which tools, practices, and methods are used when developing new product development and innovation strategies. For example, product development methods that emphasize technical functionality, but fail to similarly emphasize the role of customer development (particularly in unproven markets), can derail a company’s effort to enter new markets or expand on existing areas (Steve Blank, 2013).

Disruption

Systemic DisruptionIn an article of the MIT Sloan Review, researchers King and Bartartogtokh (2015) investigated Clayton Christensen’s theory of disruption to better understand the model. Underlining all drivers across the model is an understanding the customer’s needs (current and future).

Four factors are found to in influence market disruption:

  • technology absorption,
  • sustaining innovation,
  • disruptive innovation, and
  • customer adoption.

Additional factors unanticipated by the model also play a significant role. In particular, business agility and responsiveness to targeting and serving the ‘incumbent’s less valued (and thus less served) customers’ represents an opportunity to grab marketshare.

These findings show some cause of optimism for startups and new entrants who are interested in entering existing or new markets or creating new products.


Disruption Insights

Taking the perspective of startups in mind, the following 11-insights can be incorporated into disruption efforts at the stages of idea generation, customer development, customer validation, and product/service development:

Incumbents have been found to be less likely to respond to attacks on lower value areas of the market. As a result they miss the opportunity to protect themselves from future disruption as the new business gains stronger footing. A stronger footing can be achieved through disruptive innovation in addition to exceeding customer’s needs.

There are instances where adopting new technologies is essential to increasing efficiencies and providing added customer value. Aligning technology acquisition with the business’ core competencies and customer needs is key.


Innovative Business Models

Business model innovation represents another significant area to introduce disruption. For example, a new business’ ability to undermine an incumbent through lower innovation is enhanced when a new business model is introduced; as well as when an incumbents existing patents, trademarks, and projected intellectual property limit the incumbents ability to respond.

An incumbent’s over-commitment to their business model can also become a weaknesses that constrains their ability, and willingness, to respond to new entrants. In contrast, new technologies are not disruptive if incumbents are able and willing to respond.


Identifying Opportunities

The business’ culture influences what opportunities are exploited and those that are missed. Business’ must continue to:

  • Find products and services that play to their strengths,
  • Identifying changing needs and
  • Opportunities to improve on areas of weakness,
  • as well as Seeking to build the technologies and competencies to serve those needs.
How are product/ service development opportunities evaluated in your company? When does your company pivot to explore new innovations and opportunities? When does alignment become a constraint or liability?
Business models that have the necessary competencies to adapt to changing customer needs are better able to respond to market

challenges and to establish the product/ service standards for the future. When it comes to disruptive innovation, there is no one-size-fits-all explanation of where the challenges may surface OR solution to solve these problems.

Disruption and product development innovation is not always about providing new product/service offerings that exceed what is now available. It is also about understanding the market, the customers served, building upon your strengths, and exploiting your competitor’s vulnerabilities.

A Product Development Methodology 

Steve Blank’s ( adapted, 2013) customer development model provides a general framework for new businesses to develop new innovative products and disrupt the competition. The following documentation and planning tool builds out the product development process to includes both a customer and technical development focus. The following tool depicts these areas of focus as iterative wherein in practice they often overlap and run concurrently (Blank, 2013).


Conclusions

Disruption is not limited to the creation of physical products. It also includes the development of new methods, practices, and tools that improve how the business model performs.  As markets evolve (and contract) the business models that serve them are forced to adapt.

Those that are first to adapt have a competitive advantage. This includes a consideration of the business’ supply chain and product development methodology.

  • The goal of the product development process is to create additional value. To introduce better solutions or products than what already exists.
  • To create products that solve no existing problems, or create no new value, runs the risk of absorbing company costs but finding no customers.
  • The topic of disruptive product innovation focuses on how to unseat the competition and gain market share.
  • The methodology proposes focuses on both the customer and technical aspects of product development in the pursuit of solutions that are not easily replicated by the competition.

Disruption is within reach for those business’ that have the foresight, the tools, and the commitment.

 

How is your team supporting product development innovation? Share your comments below.

Travis Barker, MPA GCPM

Innovate Vancouver

[email protected] 

 

Innovate Vancouver is a business development & consulting service and technology startup located in Vancouver, BC. Contact Innovate Vancouver to help with your new project. Innovate Vancouver also gives back to the community through business consulting services. Contact us for more details.

 

Resources:

Blank, S. (2013). The four steps to the epiphany: Successful strategies for products that win. Pescadero: K & S Ranch.

King, A., & Baatartogtokh, B. (2015, September 15). How Useful Is the Theory of Disruptive Innovation? Retrieved December 21, 2017, from https://sloanreview.mit.edu/article/how-useful-is-the-theory-of-disruptive-innovation/