Product innovation management: Towards a constructive guide

Abstract

Manufacturing companies rely heavily on successful new product innovation to maintain profits. Moreover, research indicates that new products will account for a greater percentage of profits in the future (Crawford, 1996). Cooper (1998) contends that companies who fail to excel at developing new products will invariably disappear in the future. However, product innovation is a risky and expensive endeavour, which results in many products being aborted in the development cycle or failing after introduction. According to Liberatone and Stylianou (1995) most of the ideas that enter the new product development process fail to become commercial successes. They believe that only about 14% succeed. Harris and McKay (1996) also point out that while many companies have upgraded their product innovation process, development output is far from being maximised. This indicates that the product innovation process is neither very well understood nor effectively managed within most companies. In other words, there is some anxiety about the ability to stimulate, generate, control and steer new ideas and translate ideas into tangible products and services. Product innovation is more than simply coming up with good ideas. It is the process of developing them into practical use. Therefore, the real challenge in product innovation is not just coming up with good ideas but in making them work technically and commercially (Tidd et al, 1997; Rosenfeld and Servo, 1990). To this end, product managers must effectively manage a portfolio of innovations throughout the development process. Moreover, they must develop consistently above average performances, across several metrics, spanning critical areas of product innovation.