Can You Predict Successful Innovation? You Bet You Can

Hit New Products Aren't the Result of Just Luck or Creative Genius

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Phil Roos
Phil Roos
Popular opinion suggests that great innovation results from a mysterious combination of forces that make it appear to fall from the sky. Whether divine intervention, the harnessing of creative genius or luck, to many, innovation seems to surface at random moments and emerge from circumstances that cannot be reproduced or understood.

However, based on a 30-year analysis of 300 product categories covering 225 countries, it becomes clear this perception is false: Tomorrow's winning innovation can actually be predicted.

This is not to discount the importance of creative genius or occasional celestial help. But it is possible to determine what type of innovation will win in tomorrow's marketplace -- in essence, to see the future.

Great innovation builds on what comes before it and does not require people to make radical changes in beliefs or behavior. What often looks like breakthrough innovation is actually a small advance or twist on an established idea. That the change is evolutionary, however, doesn't keep its impact from being revolutionary.

Monitoring market evolution across the globe over time reveals patterns consistent across categories and markets.

Consumer needs evolve in predictable ways. There are waves of successful mass-market innovation that mirror a natural evolution in consumer needs.

Innovation cross-pollination
Innovation "news" that addresses those needs gets adopted in predictable ways. "News" in the form of new features/benefits first gets launched by smaller players. Competitors then add new twists, and eventually the category reaches a "tipping point" where an idea occurs with enough frequency for it to reach mass adoption. This diffusion of innovation cross-pollinates across categories and markets.

For example, Crest Whitestrips in many ways appeared to come out of the blue about 10 years ago. But an analysis of innovation patterns prior to its introduction suggests the occurrence of numerous previous products with similar approaches or delivery systems (for example, nicotine and estrogen patches, breath strips), all paving the way for Whitestrips' success. Whitestrips succeeded in the mass market by building on past news and combining it in an inventive way at the right time, addressing a natural evolution of oral-care needs.

In much the same way, Apple's iPod revolutionized the music industry in 2001, but its success was actually foreshadowed by portability, digitization and customization trends in everything from cameras to computers. Mobility of electronic devices was an innovation preceding the iPod, back to the original Sony Walkman. Thus the iPod emerged as a natural next step in the evolution of consumer multimedia needs.

The Whitestrips and iPod examples demonstrate the importance of hitting the market with the right news at the right time and in a way that addresses the natural evolution of consumers' needs. To do that successfully, it is critical to understand the four key drivers of winning innovation: business dynamics; consumer insights; creativity and design; and innovation patterns.

All are important, and a lot of good work is being done in the first three areas. But it is the fourth driver, understanding innovation patterns, that can help move the analysis from looking at the world today to projecting into the future. Deciphering existing and emerging patterns provides a view of what's going to happen tomorrow.

Understanding consumer needs
An important construct in understanding innovation patterns is a model of the evolution of consumer needs. Research indicates there are waves of successful mass-market innovation in various categories. The model can go back decades and looks at the early core motivators of the category (safety, well-being, gratification and convenience). Usually two or three category-specific motivators can be identified (things such as health, beauty and convenience). These are the primary reasons consumers come into a category in the first place.

Subsequent waves of innovation include products that deliver more advanced expressions of core motivators, the fusion of benefits and the appearance of secondary benefits. The model also plots where a category is in its evolution and shows it relative to other categories. This comparison pinpoints how a less-developed category may be influenced in the future by innovation "seeded" in more developed categories.

Based on this experience, it's easy to predict how and why consumer needs evolve. What is hard is to know what to do in response and when to do it.

This leads to a final and critical piece: identifying future innovation that will deliver against the evolving needs. To do that, all of the innovation "news" in a category can be mapped over time, much like a genealogical tree. Older or lower branches represent news that is already "mainstream" to consumers. Newer branches of the tree indicate emerging and future news, which can be identified well before it hits the mass market.

Moving beyond safe
By analyzing multiple trees across core and other categories from which innovation might be sourced, it's possible to predict what kind of innovation is likely to be adopted three to five years out. This work is a key step in helping find future white space and developing corresponding high-value strategic platforms.

It also takes a champion to put all these pieces into action, to really "see" and "be" the future of innovation within a category. The CMO plays a critical role in making sure his or her organization has the best seat at the innovation table by having the right people and the right approach in place. It takes leadership to move beyond "safe," close-in innovation and truly do the work required to be future-thinking. This is particularly challenging in an economy where each and every marketing dollar is being scrutinized. But this type of leadership is essential to position the organization and its brands squarely against the highest potential future opportunities, and to play and create in the white space that can deliver real growth.

Understanding innovation patterns is a key to defining future market opportunity and making innovation more predictable. But a little dose of creative genius is still needed to help bring identified opportunities to life, to actually create innovation that is the future of a category. A concerted creative and design effort based on evolving consumer needs and innovation-pattern learning can result in a much more future-focused, successful innovation effort.

ABOUT THE AUTHOR
Phil Roos is managing director of GfK Strategic Innovation, a division of GfK Custom Research North America. Phil has previously led Arbor Strategy Group, a successful innovation consulting practice he formed in 1998, and has played a key role in the success of strategic and brand marketing for numerous organizations. He can be reached at phil.roos@gfk.com
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