Insight into innovation

Posted on 14 Dec 2010 by The Manufacturer

Many product launches are failing because they fail to meet customers’ needs due to a lack of insight, research from professional services consultancy Capgemini finds.

Two thirds of respondents to a survey for Capgemini’s global manufacturing study, Collaborating for Innovation, said more than half of new products failed over the last three years despite increased support for innovation at an executive level. With customer collaboration highlighted as the least mature area of manufacturers’ collaboration efforts.

While 77 per cent of respondents believed that their engagement with customers was positive, almost half of respondents said that less than 20 per cent of new products originated from ideas generated or shaped by customers.

Attention to innovation as a whole is increasing, though. In 2008, the last time Capgemini conducted this research, with storm clouds of recession closing in, 50 per cent of respondents reported ‘good support’ at executive level for innovation. Now, with the downturn in its death throes and the country poised to resume growth, that number is up to 65 per cent.

Capgemini says there is also a trend emerging for manufacturers to appoint a dedicated Chief Innovation Officer role or create an innovation centre at the corporate level. And, while until a few years ago product revenues, development costs and time-to-market had been the primary performance indicators, manufacturers are now applying a more diverse range of Key Performance Indicators (KPIs), for example customer perception, to measure innovation performance.

While the report shows that manufacturers musty now work much more closely with their customers, there were other examples of collaboration identified in the research, including supplier integration, targeted outsourcing and use of social media.

“The integration of new web 2.0 collaboration methodologies into the manufacturing innovation process will lead to radically different ways of introducing new product and service innovations, involving the input of multiple participants,” said Udo Lange, Principal Innovation & Lifecycle Management, Capgemini. “Business innovation and collaboration should now be fully integrated parts of any corporate strategy, and it’s good to see increased support for innovation at an executive level. Our Collaborating for Innovation study suggests the manufacturing industry is heading in the right direction.”

The Collaborating for Innovation report, based on responses from 189 manufacturers, is