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Source: Cooper, R.G.,
Edgett, S.J. Product
An organization’s business strategy typically defines key objectives, overall direction, priority initiatives, and the expected pace of growth. A Product Innovation and Technology Strategy is an important enabler of your organization’s business strategy. As such, companies rely on new products, technologies, and platforms to advance their business strategies in a variety of ways and create customer value, grow market share, enter new markets, increase profitability, and even alter market and competitive landscapes. Therefore, a Product Innovation and Technology Strategy is the essential link between development efforts and your business strategy.
You can monitor the execution of your Product Innovation and Technology Strategy using a practice called New Product Portfolio Management. This practice offers executives visibility to the pipeline of new product, technology, and platform projects, enabling strategic project selection, prioritization, and spending decisions.
Meanwhile, the gates in your Stage-Gate® process offer rigorous business evaluations of each new project, screen out poor (and off-strategy) projects, enable Go/Kill decisions and approve project plans for the next stage, including resource requirements. The Stage-Gate model is the essential roadmap to achieve quality execution and accelerate the right projects from inception to successful launch.
Last but not least, effective project management techniques deployed during the stages in your Stage-Gate process enable on-time and on-budget delivery of projects.
The Elements of a Product Innovation and Technology Strategy
Top performing businesses consistently approach the following 6 elements as the ideal flow, or “thought process” to guide leadership teams in developing an insightful Product Innovation and Technology Strategy.
- Objectives and Role.
The business’s Product Innovation and Technology Strategy specifies the objectives of the new product effort and indicates the role that product innovation will play in helping the company achieve its business objectives.
- Arenas and Strategic Thrust.
Focus is the key to an effective Product Innovation and Technology Strategy. Your Product Innovation and Technology Strategy specifies where you will and where you will not attack. The concept of strategic arenas is at the heart of a new product strategy – the markets, industry sectors, applications, product types, or technologies on which your business will focus its new product efforts. Specifying these arenas is fundamental to spelling out the strategic thrust of the product development effort. It is the result of identifying and assessing product innovation opportunities at the strategic level.
- Attack Strategy and Entry Strategy.
How do you plan to attack each strategic arena? You may choose to be aggressive and be the industry innovator, the first to the market with new products; or the attack strategy may be to be a “fast follower”, waiting and watching, and rapidly copying and improving upon competitive entries. Other strategies focus on being low-cost versus a differentiator versus a niche player. The global dimension is also part of the attack plan: whether to adopt a global, “glocal”, or regional strategic approach to product development.
- Deployment – Spending Commitments, Priorities and Strategic Buckets.
Strategy becomes real when you start spending money! How much you spend on product innovation and the emphasis you place on each strategic arena naturally enables the next key decision to ‘bucket’ resources for each arena. Assigning buckets of resources helps to ensure the strategic alignment of product innovation with your overall business goals.
- The Strategic Product Roadmap – Major Initiatives and Platform Developments.
A strategic product roadmap is an effective way to communicate a series of major initiatives in your attack plan. Your strategy should map out your planned major new product initiatives (and their timing) that are required in order to succeed in a certain market or sector. It may also specify the platform developments required for these new products.
- Tactical Portfolio Management Decisions – Project Selection.
Last but not least, using a method to monitor the execution of your Product Innovation and Technology Strategy improves the odds that you will successfully implement it. However, due to the unique and risky nature of innovation, monitoring progress by way of a master project implementation schedule simply is not sufficient. Not every project that is initiated will be worth completing. As new ideas make their way through the Stage-Gate process, their initial attractiveness can improve or deteriorate as new information becomes available. In fact, the Stage-Gate model is specifically designed to enable several Go/Kill decisions points throughout a project’s journey. Additionally, when you provide executives with visibility to the entire portfolio of projects, their individual project selection decisions could further optimize the portfolio and even maximize its value.
A Product Innovation and Technology Strategy is an important enabler of your organization’s business strategy. Organizations can and do drive more value from their product innovation efforts simply by clarifying how their new product and technology development plans are linked to their business strategy. Propel your product innovation results to the next performance level with these 6 practical steps.
Explore our articles and resources to learn how to develop a Product Innovation and Technology Strategy.