What is the purpose of innovation? Is it..
- To create new products…
- To create new customer demand…
- To build strong teams capable of constant innovation…
… or all three?
Well, you guessed it, it’s all three…. but to find out why is this an important question we need to go back a bit…
Until recently, the job title – New Product Development (NPD) Manager or Director was very common. However, now we see these roles increasingly re-titled as ‘Innovation Director’.
In the past, this role was about Research and Development (or R&D) – very product focused and very focused on the area of science or technology that was chosen as a strategic priority (chosen, that is, by executives rather than customers).
Equally, roles previously described as ‘brand development’ are now often called ‘Innovation Directors’ too. So what’s this about?
Well, the brand director is responsible for the customers or market places experiences and views and opinions (good will, if you like) towards the companies products and services.
The fact that this role is also being re-titled with ‘Innovation’ is why we are now a little confused.
Add into this mix the point that the third core purpose of innovation is to create teams of people (who are able to invent, match to market etc…) and that explains why we are confused about innovation.
Okay, so what is going on?
Quite simply, there is a recognition that developing new products is a cost centre – developing new brands or customers is (often) a cost centre too – and that businesses – no matter how large or small – need more profit centres.
The profit, of course, comes when you have the right product, right market demand and the right team. And the shift in job title tells you that, starting from different positions, there is an increasing recognition that these roles need to become about building self-sustaining sources of profit.
The only problem is that, put like this, it quickly begins to sound like the CEO’s job. Which of course it is – and this explains why some people believe the CEO should also be the Innovation Director.
Nevertheless, the take away point here is that successful business is based on successful innovation – that is, building self-sustaining sources of profit. And, the key to profit is the ability to balance product, market and team.
Leave out any one of these key elements and the business (and product) will almost certainly fail.
Want help building an innovation engine to create sustainable profit? Contact me…