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SERIAL INNOVATORS

Stanford University Press

Contents

Preface and Acknowledgments...................................................................................................................ixIntroduction: Serial Innovators and Why They Matter...........................................................................................11 Breakthrough innovation in Mature Firms.....................................................................................................142 The Processes by Which Serial Innovators Innovate...........................................................................................363 Customer Engagement for Breakthrough Innovation.............................................................................................704 Navigating the Politics of Breakthrough Innovation..........................................................................................895 Characteristics of Serial Innovators........................................................................................................1126 Identifying and Developing Serial Innovators................................................................................................1357 Managing Serial Innovators for Impact.......................................................................................................1528 Love Letters to Our Customers: Serial Innovators, Aspiring Serial Innovators, and All Those with and for Whom They Work.....................183Appendix: Interview Suggestions for Identifying Potential Serial Innovators...................................................................203References....................................................................................................................................209Index.........................................................................................................................................213

Chapter One

This chapter describes the

• Different types of innovations firms need to commercialize to both support their ongoing businesses and grow their firms into new market space;

• General processes by which both incremental and breakthrough innovations most typically are developed, and why creating successful breakthrough innovations is so difficult;

• Different tasks that people in various innovation roles perform;

• Positioning of the Serial innovator model of innovation vis-à-vis the technology push and market pull models; and

• General structure and components of the MP5 Model of Serial innovators and how they innovate, which drives the structure of the rest of this book.

Firms need to support two types of innovation to stay competitive and in business. They need incremental innovation that provides ongoing improvements to current products and product lines. However, they also need breakthrough or radical innovation that produces enormous performance increases in current products (e.g., a fivefold or more increase in the performance of current features or at least a 30% decrease in cost to produce) or results in innovative products that move the firm into new white space by providing an entirely new set of performance features (Liefer et al. 2000). These two types of innovation need different development processes.

INNOVATING TO SUPPORT THE ONGOING BUSINESS

The majority of the firm's development efforts, over three-fourths of the total number of projects undertaken (Barczak et al. 2009), are spent improving the performance of products currently marketed or adding new products to current product lines. These projects tend to improve or change product performance incrementally.

Typical product improvement efforts for a diesel engine manufacturer might be a new engine with increased fuel efficiency or decreased emissions. other examples of product improvements include faster computer chips, smaller and lighter laptops, easier to operate software, softer bread, and creamier ice cream. While significant engineering or development effort may be required to achieve these goals, the desired outcomes are rather predictable and to consumers appear evolutionary in nature. These projects are necessary to retain customers over time, providing them with reasons to repurchase from your firm, rather than from your competitors. Firms that do not continue to renew and improve their current products stagnate and lose customers to competitors. The U.S. car industry's failure to evolve and to upgrade their small car offerings has contributed significantly to their demise, as Kia, Hyundai, and even BMW (Mini) and Smart have materially encroached into this segment of the U.S. And global automobile market.

Developing products that expand a current product line allows firms to increase usage with current customers. For consumers who value variety, larger product lines may mean increased absolute consumption. If, for example, Abbie kept only two varieties of granola bars in the pantry, her son might have a granola bar for a snack after school two or three days a week, substituting some other snack on the other days. However, if the cupboard held six or seven different granola bar flavors, he might choose granola bars as his after-school snack four or five days a week, increasing his absolute consumption of granola bars, at the expense of another snack food. Variety-seeking is a major reason why grocery stores have one full aisle of ready-to-eat cereal, and why some closets contain forty to fifty pairs of shoes.

Extending a current product line also may attract new customers, whose tastes or needs differ somewhat from those satisfied by current offerings. When yogurt manufacturers expanded from fruit-flavored yogurts to chocolate flavors, their targets were chocoholics who previously had not been yogurt consumers because they were not fruit fans. Similarly, the primary users of Palm's PDas traditionally were professionals until the company's Zire line extension specifically targeted the broader market of students and nonprofessionals. While the Zire used the same operating system and had a similar look and feel, it was less expensive than the professional Palm and was differentiated from the rest of the line by simplicity: it had a monochrome screen without backlighting, only two quick buttons instead of four, and a traditional up/down navigation button instead of a five-way navigator.

Developing line extensions involves slightly greater effort and risk than developing incremental improvements to current products. Such changes require more research into customer needs, for example. Even still, the development effort is predominantly evolutionary and predictable. Given this predictability, the probability of success can be maximized by implementing formal product development processes. Indeed, over the last twenty-five years, academics and practitioners have made great strides in understanding how to manage these projects more effectively and efficiently, and in developing formal processes for doing so. These formal processes, such as the Stage-Gate® process illustrated in Figure 1.1, ensure that none of the details necessary for successful development are overlooked, specify who is responsible for completing which tasks, and provide a road map for when various milestones...