Mals Musings: This Little Innovation Went to Market...

Our world is no longer best described as changing. It has already changed. Some of the changes will have a lasting effect on our industry.

By 'Mal Barnard' on May 11, 2010

Our world is no longer best described as changing. It has already changed. Some of the changes will have a lasting effect on our industry. In addition to the global economic downturn and challenges in bringing innovation to market, we also have an increasingly hostile government and consumer groups to contend with. One thing is clear: One of the cumulative effects of all these changes is a market that will only reward genuine innovations.

Today, it is almost impossible to get price parity for me-too solutions, let alone a premium. So the ability to successfully bring innovations to market will be vital to the future of the industry.

History is littered with lessons from academics and practitioners about how to maximize outputs from our innovations. The need to heed to those lessons is stronger now than at any other time. First point, great and viable innovations fail all the time. The reason is, there are many hurdles that an innovation needs to get over to become a success. One of the most common errors made is to treat all innovations the same. They differ and the way we introduce them to market also differs.

 

Me-too. These are products with no major difference or point of advantage over existing products but also they do not differ in philosophy, approach or use. We spend too much effort doing aimless branding exercises trying in vain to engineer a difference. This has been responsible for the erosion of our reputation.

Stillborn. These innovations are dead on arrival. They have no advantage over existing options but in addition require a shift in philosophy, approach or rational. Most products that fall into this category are destined to fail.

Discontinuous innovation. These products offer a clear advantage over existing products. However, it comes with the price of requiring a shift in philosophy, approach or rational. In our conservative industry, if this is not managed carefully, even with relative advantage these products can still fail.

Blockbuster. In terms of innovation, this represents products that offer a clear advantage over existing products while building on existing beliefs, approaches and rational. These are the easiest innovations to bring to market, although fewer launches fall into this bracket.

 

It is vital to understand which category your product falls into, since the approach that you will need to take differs. A decade or so ago, I witnessed a failed attempt to launch a very innovative product that fell into the discontinuous innovation category. The product offered clear advantages over the existing products. Buoyed by this, the organization leapt into the market. The sales never came in, to their surprise. Why? They had underestimated the power of continuing with what you know and what you believe in. The potential of discontinuous innovations is matched by the effort required to get it going.

 

In comparison, genuine blockbusters are much easier to launch, although we have fewer products falling into that category and many are somewhere in-between, which means we need to understand the principles that guide the diffusion of innovation. There are five critical facts that affect the speed of diffusion of any innovation:

  1. Relative advantage. Is it better than existing products? The bigger the improvement, the faster the diffusion
  2. Compatibility. How well does it fit with existing practice? If it changes practice, it will slow the rate of diffusion.
  3. Complexity. How complicated is the product to use in terms of dosage regime, etc? The simpler it is, the faster the diffusion. The success of many once daily versions supports this.
  4. Trial-ability. Can I try it? If it is trial-able, it is likely to diffuse faster.
  5. Observability. Who else is using it? If I can see others using it, it will spread faster.

Knowledge of this will not propel our innovation into the market. However, applying the principles to the way we develop and market our products will have lasting impact.