Invention, Innovation, and Product Development

Rajendra K. Lagu

Presentation Outline
Invention vs. Innovation Product P d tD Development l t Product Development Management Questions and Answers
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Invention
Not to be confused with discovery y Newton discovered gravity g bulb Edison invented light Invention is generally associated with natural phenomena and so Science-Technology dominates i invention ti landscape. l d Major inventions that have changed our lifestyle transistor Internal Combustion engine transistor, Inventor does not worry too much about market size etc.
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Innovation
General definition of innovation
New Novel High-tech

An innovative product makes a leap in the b fi benefits-to-costs ratio i in i some area of f endeavor.
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Cost-Benefit Analysis y
Any transaction that one enters into buying a product, d using i a service i has h costs incurred i d and d returns expected. Costs: money, difficulty, physical risk, inconvenience boredom inconvenience, B Benefits: fit effectiveness, ff ti safety, f t speed, d pleasure, health, fun
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Examples of Innovative Technologies/Applications

Optical Communications speed vs cost g Systems: y choice vs cost Flexible Manufacturing Web-enabled processes customer satisfaction vs cost Instant Camera, Digital Camera y delivered international E-mail: Instantaneously mail, virtually free

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Innovation
Should not be confused with high-tech Frequent Flier programs from Airlines joints - Starbucks International chain of coffee j Adaptation can lead to innovation too Microwave ovens Dont innovate for the future; innovate for the present. (Need must be immediate or nearimmediate) Leonardo da Vincis sketchbook

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High, g , Low and No Tech Innovation

High Tech innovation happens through new discoveries (mostly in natural sciences)
NMR Human Genome Project

No Tech innovation happens by finding gaps in market created as a result of changes in values, perceptions, attitudes, and demographics
Ready-made food packets, fast food chains Installment buying Insurance
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Innovation Process
Ref: Peter Drucker: Innovation and Entrepreneurship

Innovation is a systematic, organized, rational work usually done in many stages Analyze, test, pilot, experiment Treat change as opportunity, look for new realities and incongruity between people peoples s perception of reality and what has become actual reality.
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Changing g g Demographics g p
Population its size, age distribution Composition, classes Ed ti l status Educational t t Cultural preferences Rural-Urban shifts

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Product Development p Methodology gy

Company p y must have core competency p y in the p product space - technical, managerial and marketing Products are developed for particular platforms and their success is linked to that of the platform. Product variations Personal, Professional, Enterprise Portfolio of products synergy, bundling, and selling deals Product versions: Oracle 8i, Indica V2, Ambassador Mark 4
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Product Development p Phases

Idea Generation inspiration, feel, experience, creativity Market validation need assessment, collate features, find gaps Exploring alternatives feasibility study Freezing the specs and features Choice of the architecture subsystems/modules,
connectivity, front-end/back-end, hardware/software
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Product Development p Phases

Team selection and resource allocation Building the prototype Getting early customer feedback freeze specs Alpha and Beta testing Launch and subsequent support branding, channels,
distribution
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Product Development Management

Often confused with Project Management Product development has many issues which are generally irrelevant in project development work Project development fixed price / T&M
Client specifies the specs and delivery deadline Developers are insulated from the competitive landscape

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Product Development Strategic Issues

Timing g is everything. y g Products operate p in a competitive p landscape. p Competing and/or substitute products are announced in the middle of the development cycle. Set of features is a moving target early customer feedback has to be incorporated.
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Features-Resources-Time Triad
Issues to be handled at the beginning
Acceptable set of features What resources to deploy (team size, budget) Development Timeframe
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Features

Starting point

Resources

Time
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Pitfalls in Product Development Management

Conflict of interest between Marketing, g, Development, p , and Finance functions Is it healthy or vicious? Tendency to trade Men for Months
Brooks Law

Excessive emphasis on time to market or features Excessive emphasis on time to market or quality

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Some Observations about the Product Development Process

Small, autonomous, cohesive teams build great products. Strong intra-team communication and loose interteam coupling works best. Documentation is not as important in product development lifecycles as in projects. Resourcefulness and skimping works!!
Tom Peters -- Skunkworks
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More Observations
Product development gets late by three months one day at a time TNT vs Termite Have deliverables d li bl and d milestones il every 4-6 weeks. Avoid major integration in the end. Dynamic range of knowledge worker productivity is 1:10, so star teams can deliver incredible results. p can lock resources into Inter-team dependencies idling phases so transparent communication is everyones responsibility.
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Still More Observations

While choosing the product feature set, apply Pareto principle: 20% of the product features are used 80% of the time time. Microsoft WORD, EXCEL Using product is increasingly becoming an experience p Take holistic approach. pp It is good to enter early in a space but it is not necessary to be the first.
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Summary y
Invention is driven by science and technology. Innovation is driven by customer needs. Product features get decided by the competitive l d landscape, available il bl resources, and d time i to market. k Product Development Management is a distinct and unique business process with its own skills and pitfalls
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