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Born in the Flat World: Bringing new products to life in a hyperconnected world

Or: If you build it, will they come?

As I've written earlier, in the lexicon of modern-day business, innovation and isolation are firm opposites. The most successful companies have embraced unplugged approaches to innovation, which seek to allow the judicious flow of information, ideas and insights across what would conventionally be watertight walls.
Unplugged approaches epitomize how innovation happens on our ever-flattening and increasingly hyperconnected planet. Innovative new companies such as Innocentive have  even built a business model around helping such unplugged innovation thrive.

But let us pause to dwell upon the fate of the new products being birthed thus.
Across industries, the mortality of new products has traditionally been high (as high as 60%, or even higher depending on which source you consult). Clearly, new product innovation is fraught with risk.  Can unplugged approaches to innovation help ameliorate this risk?

I believe they can – particularly those that emphasize blurring barriers with customers, such as Co-creation and User-centric innovation.  These approaches to innovation posit that you should begin working with customers long before the new product is complete. They obviate the conventional need to have a complete product before coming to market, instead allowing the product to evolve in the direction of a more organic fit with customer needs.
In other words, rather than assume if you build it they will come, these approaches take the more pragmatic route of saying, if you invite them (customers) to help create the product, maybe they’ll use it!

Any new product innovated thus - whether it represents a minor incremental innovation or a truly disruptive one - stands a much greater chance of customer acceptance. To validate this hypothesis, let's look at some of the most ‘heralded’ new product failures of recent years*, and examine if these products may have benefited from greater customer involvement at the pre-launch development stage.
Boo.com, a fashion retailing website which became iconic of dot-com disasters, failed because it was just difficult to use. It was poorly designed, with a heavy home page consisting of several hundred kilobytes – a big boo-boo at a time when most users only had slow dial-up internet access.

Iridium, a system for satellite telephony that had stratospheric ambitions, was a technological marvel. Indeed, it had world-flattening potential that was sky high. Sadly, it never really took off - in large part because the handsets were bulky, unwieldy and difficult to use. They also needed line-of-sight access to the open sky. Understandably, few customers relished having to go outdoors to make a telephone call.
New Coke, introduced with much fanfare in 1985 with the ambitious plan of replacing the company's flagship Coke drink, was summarily rejected by consumers. The company was surprised, as all consumer research had shown that consumers would welcome New Coke.

WAP (Wireless Application Protocol) sputtered primarily because most WAP service providers forgot usability issues (most users only had cellphones with tiny monochrome screens at the time), and did not work hard enough to ensure that the customer would have sufficient reasons - i.e., content - to access WAP sites.
In each case above, the product was impressive and had indubitable merits. In each case the product failed primarily because either the customer was not involved in the process of bringing the product to market, or was involved too late - almost as an afterthought. Whether in the case of Boo.com, WAP or Iridium, it is amply clear that working more closely with customers right thru the development stage would have saved the promoters much headaches, and some late surprises. It would have allowed them either to come to market with a product that met customer need more closely, or would have given them sufficient insights to abandon the new product early, avoiding the cost - and mortification - of post-launch failure.

Co-creation for Coke creation?

The case of New Coke is particularly instructive. Here the new launch faltered on two counts. One was that only "sip" tests were conducted. In actual use, consumers do not just sip the drink, they drink it. More thorough home tests could have revealed greater insights into what consumers would prefer to drink. However, the second mistake was far more egregious. They underestimated the deep emotional attachment that people had for the traditional Coke drink ("The Real Thing"), and did not anticipate the sense of betrayal it's stoppage would trigger in a sizable consumer segment. Clearly, both mistakes could have been avoided in substantial measure, by engaging much more closely with customers long before launch.
While the above analysis is admittedly not high on scientific rigor (hey, this is only a blog, not a scholarly research paper!), it provides sufficient evidence that approaches such as Co-Creation and User-centric innovation can go a long way towards saving new products from the graveyard (or wherever failed products go). And for products that belong in the graveyard, these approaches are likely to help consign them there speedily.

It’s important not to over-simplify here. The reasons for product failure are myriad, and often embedded deeply in – and inextricable from - the specific organizational and market context. And companies typically put their best resources behind new products. So I’m not suggesting any simple-minded formula for new product success – there isn’t any. But if there can be any such formula, it will certainly include working closer with (and to) customers!
Also, the smartest companies, while learning to thrive in the flattening world, have already internalized this lesson – it may not be a coincidence that the product failure examples above all date to several years ago!

Thus, a high-probability route to product failure lies via splendid isolation. If you want innovation that leads to successful products, unplug it. And get products that can proudly carry the label: “Born in the Flat World”. ____________________________________________________________________________________
* understandably, companies are not overly eager to publicize product failures, and so data on such failures is not easy to come by. The products chosen for this analysis are drawn from various lists of the best-known product failures of recent years. Some have even become part of business folklore.

 

Comments

Great article. But it's quite hard to sustain oneself/company on product base.
Especially in India considering the lack of infrastructure and lack of consumption of innovative products. While doing consulting work will succumb us gradually.
We need a mixed portfolio of flat products for flat world and thick consulting for rest of the world.

Agree with you, till now companies have been content merely by providing customers choice of channels by which they can contact them for information or complaints. Important thing is that information which is captured during these interactions must be analyzed to understand the customer behavior and service/product preferences as these are dynamic in nature.

It is important that customer usage pattern is tracked by using some CRM tools and based on the same, companies can identify their needs better and can incorporate the feedback in New Product Development. Customers can also be encouraged to use these tools to design products/services which meet their needs.

Companies need to do touch-point analysis that can help them in developing strategies which will help them not only to retain but also to grow targeted segments. The aim of this is to enhance the customer experience every time the customer comes in contact with the company or its products/services and make customers a co-partner in the overall product development

This is a very interesting topic - why do new products fail?

An insight to business literature will show that the reasons for this are many and there is no golden bullet. The success of Black berry, iPod in face of examples quoted in the article, just goes on to show that Innovation & Isolation are probably not the opposites but two different approaches. Customer needs drive the product but the customer voice in NPD needs to be evaluated in a given context, While it is important, it is not the only critical factor in all NPDI cases.
In areas of high technology, we still find that new products germinate as a result of focused efforts in labs, there has been much success in usability and other aspects as pointed in the article due to early customer involvement. The evolution of concept of value networks or Innovation networks on the other hand is to leverage the best in environment and share the risk across value chain.

Flattening world reduces the barriers and provides opportunities to firms to leverage the core competence of the value chain but it also increases the complexity as customer preferences vary across regions (mass customization vs market of one) and there is need for higher co-ordination.

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