The term “Innovation Maturity” implies not only that some companies may have higher levels of innovation capability than others, but also that they may be enjoying benefits from their innovation investments that others are yet to realise. Prodex Systems’ Managing Director, Gerard Ryan, discusses how to build innovation maturity to better leverage the investments made in New Product and Business Innovation.
Innovation has come of age!
After years of lip service, innovation is now firmly on the corporate agenda as the key to survival and growth.
Competitive pressures, the fragmentation of markets and the relentless trend towards the commoditisation of products and services demands an effective response - the creation of a highly effective and highly efficient innovation program.
The innovation challenge
New products typically account for approximately 30% of company sales when defined as products which have been on the market for 3 years or less. While this metric varies between industry sectors and between companies, the rate of new product introductions and corporate dependency on their success is increasing and is expected to grow by a further 21% over the next 5 years.
Despite demand for growth through innovation, almost half of product innovation projects fail to deliver against their project objectives. Worse still they are often late to market and over budget.
Average companies get average results
Across any measure, the contrast between “average” performers and “best” performers in new product surveys is staggering.
Translated into business results, an effective innovation program will:
- Increase the success rate of new products
- Reduce time to market for new development projects
- Increase the proportion of projects delivered within budget
- Shift portfolio balance away from incremental product development
- Increase the proportion of ‘new to company’ and ‘new to market’ products
- Reduce the total number of development projects
- Increase the average value of each project
- Increase sales and margin