Developing a Product Innovation and Technology Strategy for Your Business

Topics: Management, Strategic management, Innovation Pages: 15 (4403 words) Published: February 15, 2013
Product Innovation Best Practices Series

DEVELOPING A PRODUCT INNOVATION AND TECHNOLOGY STRATEGY FOR YOUR BUSINESS

Reference Paper #39

By Dr. Robert G. Cooper and Dr. Scott J. Edgett

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This article first appeared in Research Technology Management May-June 2010, Vol53, No3, pgs. 33-40

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DEVELOPING A PRODUCT INNOVATION AND TECHNOLOGY STRATEGY FOR YOUR BUSINESS A framework for developing a product innovation strategy includes defining innovation goals and objectives, selecting strategic arenas, developing a strategic map, and allocating resources.

Robert G. Cooper and Scott J. Edgett
OVERVIEW: Many companies lack a clearly articulated and well-communicated product innovation and technology strategy. Such a strategy is essential and is strongly linked to positive performance in product innovation. A framework for developing a product innovation strategy is presented, and the various steps of strategy development are described, from best-practice ways to define innovation goals and objectives through to the selection of strategic arenas and the development of the strategic map. Defining attack plans and entry strategies are also described. Finally, methods for resource allocation and deployment using strategic buckets and strategic roadmaps are outlined. KEY CONCEPTS: innovation strategy, product development strategy, strategic arenas, strategic buckets, roadmaps, entry strategies In the late 1990s, two large firms were growing by leaps and bounds, driven by the boom in fiber-optic communications. They were Corning Glass, which manufactured fiber-optic cable, and Nortel Networks, which produced the boxes at each end of the cable to convert the light signal into an electronic signal. Then came the crash of 2000; overnight, both firms’ sales plummeted, and their share prices plunged from over $100 to about $1. Dr. Robert G. Cooper is Emeritus Professor, DeGroote School of Business, McMaster University, Hamilton, ON, Canada; ISBM Distinguished Research Scholar at Penn State’s Smeal College of Business Administration; and President of the Product Development Institute. Cooper is an acknowledged global expert in the field of innovation management, a Fellow of the PDMA, and creator of the Stage-Gate® new-product process used by many firms to drive new products to market. He is a prolific researcher and publisher in the field of innovation management, with over 100 articles and six books. robertcooper@cogeoc.ca; www.stage-gate.com May—June 2010

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Ten years later, Corning is thriving, whereas Nortel is in Chapter 11 and being broken up. Why? How did two great and innovative companies, facing the same crisis, end up so differently a short decade later? One reason for Nortel’s demise is that the company lacked direction and an innovation strategy after the crash; instead, it limped along from one ad hoc decision to the next. By contrast, Corning’s senior management took charge, developed a strong product innovation and technology strategy for the firm, and provided leadership and direction to see that strategy through (1). Corning’s management took a hard look at the company’s previous 100 years of successes in innovation and what drove them. They concluded that the “repeatable keys” to success—the elements in Corning’s culture and history that they could draw on to face this new challenge—were a leadership commitment, a clear understanding of the company’s capabilities, a strong connection to the customer and a deep understanding of major customer problems, and a willingness to take big but...

References: 1. Kirk, B. 2009. Creating an Environment for Effective Innovation. Presentation given at the Stage-Gate Innovation Summit 2009, Clearwater Beach, FL, February. 2. Cooper, R. G., Edgett, S. J., and Kleinschmidt, E. J. 2004. Benchmarking Best NPD Practices—2: Strategy, Resources and Portfolio Management Practices. Research-Technology Management 47(3), pp. 50–60. 3. Parts of the remainder of this article are taken from R. G. Cooper and S. J. Edgett, Product Innovation and Technology Strategy (Hamilton, ON: Product Development Institute, 2009). 4. For an outline of portfolio management methods, including strategic buckets, see R.G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products, 2 ed. (Reading, MA: Perseus Books, 2002) and R. G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Optimizing the Stage-Gate® Process: What Best Practice Companies Are Doing—Part II, Research-Technology Management 45(6), pp. 43–49. 5. This section is taken from R. G. Cooper, Your NPD Portfolio May Be Harmful to Your Business’s Health, PDMA Visions 29(2), pp. 22–26; for a more in-depth discussion on strategic buckets see Portfolio Management for New Products, pp. 123–136. 6. For more on roadmaps, see R. E. Albright and T. A. Kappel, Roadmapping in the Corporation, Research-Technology Management 46(2), pp. 31-40; A. McMillan, Roadmapping—Agent of Change, Research-Technology Management 46(2), pp. 40–47; and M. H. Myer and A. P. Lehnerd, The Power of Product Platforms (New York: Free Press, 1997). 7. The term “product roadmap” has come to have many meanings. Here we mean a strategic roadmap, which lays out the major initiatives and platforms the business will undertake well into the future, as opposed to a tactical roadmap, which lists each and every product, extension, modification and version. 8. The term “technology roadmap” also has several different meanings. Here we use the term to denote a plan for the business’s expected technology developments or acquisitions; by contrast, the term “technology roadmap” is sometimes used to describe an industry technological forecast laying out what new technologies are anticipated in an industry.
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