Getting product development right is often a rare combination of innovation, creative process, critical thinking, market awareness, and discipline. Product development addressing new needs and markets is best done in an evolutionary manner—in incremental steps that work with proven technologies. If done right, product innovation can be very rewarding but always includes some measure of risk. Building on proven products and technologies can help mitigate some of that risk.
Companies that do product innovation well are able to take existing products and technologies (often many) and combine them in inventive ways to address new markets with new products. They create new products from a more effective application of products, processes, technologies, services, and/or ideas that are readily available. They meet new requirements and satisfy market needs that are often not addressed or are poorly addressed by others.
An excellent example of a company doing this with their products is Apple with their CarPlay system. CarPlay combines Apple’s Siri®, iTunes®, GPS, messaging, IOS, and other iPhone® functionality and brings it to the car dashboard. This is a great example of innovation in that it’s incremental, leverages technologies that many already use daily, and makes these technologies available in another environment people use on a daily basis.
From a product management perspective, there will always be a need to improve and maintain, but companies need to be careful not to get caught in a “renovation death spiral.” This can occur when they are developing new ideas and processes in order to defend their current position rather than push the company forward with new ideas, products, and services. These companies devote their development efforts to fine-tuning their existing product line rather than coming up with new products for new markets.
This is renovation, not innovation, and is common among companies that are market leaders with a product or service. These companies can find themselves being completely replaced by emerging companies creating innovative new products and technologies. This is often a reason for making external purchases of companies or products.
Examples of this type of displacement abound, sometimes affecting entire industries. It’s particularly common in publishing, music, and retail—industries that see lots of rapid technology changes and product innovation.
Can you name any companies that were displaced because they failed to innovate, but eventually managed to recover?
Siri, iTunes, and iPhone are registered trademarks of Apple Inc. IOS is a trademark or registered trademark of Cisco in the U.S. and other countries and is used under license.