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Innovation, Advanced Development, IP & Competency: Four Inescapable Product Development Trends

R&D and product development professionals had slightly different experiences to improve execution vs. their manufacturing counterparts, as we can observe in Exhibit 1.

Exhibit 1: Successive Generations of Western Innovation Productivity Improvement
 
Successive Generations of Western Innovation Productivity Improvement

Source: Goldense Group, Inc.

By the end of the 1990s, 80 percent of companies had overhauled product development processes to achieve seamless “Concept-To-Customer” execution. But the challenges had only just begun.

Advent of the Innovation Age

In the early 2000s, China and India arrived on the world stage. It was foreseen that these two giants would move more quickly through cycles of learning and would soon compete on design, not just lower manufacturing costs. At the same time, western companies had achieved largely equivalent execution processes and now needed ways to achieve competitive advantage—to compete with other western companies and with rapidly-emerging Asian competitors. The next obvious basis of competition was on the “portfolio” of products being pushed through the execution processes. A better product mix would yield better business results.

It was soon obvious that a better product mix was highly dependent upon a company's ability to out-innovate its competitors. By roughly 2004, just about all western companies sought innovation techniques that would give them a competitive advantage. As is typical of capitalism, enabling tools and techniques are not created until market demand reaches a certain critical mass in which good returns on investment can be realized. By 2004, the demand was there.

Trend 1: Innovation

Two separate innovation-enabling markets emerged at about the same time. Organic innovation, historically the darling of Wall Street, needed improvement. For a decade or more, execution and time-to-market were the primary organic innovation values. Product development processes had become filled with execution tools and convergent value sets. If a product was not originally targeted to be innovative or inventive in nature, there was little chance it could become so with the execution mindset that was in place. Open innovation, historically a concern of top managers for a multitude of reasons, had to be pursued because two decades of execution had drastically diminished the investment in research and lowered the inventory of near-commercialization ideas and products that companies historically had in their coffers. Out of necessity, companies also started t o look outside of their four walls for opportunities that could give them fairly immediate gratification.

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