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Bold Innovation

Once entrepreneurial products enter the market maturity phase there is a tendency for firms to engage in commoditisation in the face of increasing competition. Shareholder demands for short-term profits result in a focus on short-term, low-risk development projects. Resources tend to be assigned to the wrong areas of product development—the flat markets, mature technologies and tired product categories which constitute the majority of the firm’s product portfolio (Chaston 2016).

Cooper (2011) argued that to avoid this outcome, ‘bold innovation’ is required, with the firm focusing its R&D efforts on the most attractive arenas for future market growth. To allow this the firm will need to create a positive climate for entrepreneurial innovation, support innovation at every opportunity, recognise innovators and successful development teams and welcome ideas from all employees. Furthermore, the right senior leadership team is needed to drive and support the innovation effort with words as well as through actions. Unfortunately many businesses lack the necessary climate, culture and leadership for innovation and consequently fail to engage in larger-scope and more imaginative development projects.

Cooper noted that generating great ideas is only half the battle. Success also requires an effective rapid idea-to-launch system. Many businesses also have lots of good new product ideas but lack the appetite to invest in larger-scope, more risky projects despite the fact that they promise to be tomorrow’s growth engines. Part of the problem can be the lack of a solid business case. Big-concept projects are innovative and risky, and it can be difficult to collect accurate data to construct a solid, fact-based business case that will convince senior management to make the investment. When making decisions, senior management should drop their reliance upon the financial tools and return-on-investment methods that work for smaller, less innovative projects, but may lead to the wrong decisions when it comes to larger-scope, riskier innovation programmes. Ideas should, rather, be assessed in relation to fertile strategic arenas identified as likely to offer major new sources of market growth through the development of radically new products or services.

Cooper suggested that a much greater potential for success comes from a philosophy of attacking from a strong position. This approach relies upon identifying the unique capabilities that the firm can leverage to advantage in other markets, applications and sectors. He suggested that specifying these strategic areas is key to defining the nature of major new product development efforts. Without this the search for specific new product ideas or opportunities is likely to remain unfocused and the portfolio of new product projects can contain a lot of unrelated projects in many different markets, technologies or product types.

 
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