Evolution of Innovation Process - Case Study Example

Evolution of Innovation Process 3M, which started in 1902 moved into manufacturing sand papers after a failed mining venture. 3M always found innovative solutions to the problems they encountered in the surrounding environment, through inventive insights and novel ideas. Eventually, they became the pioneers of the world’s first water proof sandpapers during the 1920s. During the same decade, one of the young assistants at the lab came up the idea which gave shape to ‘masking tapes’. These out of the box innovations at times which were out of turn gave rise to the basic principles which 3M follows till date. 3M understood that innovation happened through a librated attitude towards the employees and therefore let them function and innovate without many constraints. The same person (the lasb assistant) invented Scotch ® tapes. Even Post-it ® tapes were one of his inventions. 3M’s internal processes where innovative themselves which created a congenial environment for innovation on part of the employees. It introduced a ‘Dual ladder’ policy through which senior employees with technical proficiency could rise up the organization following a parallel path and without getting involved in the management. The firm encouraged innovation through grants and also allowed the personnel to deploy 15% of their working time for innovations and ideas provided they took care of their assigned projects. Innovation through inter departmental joint-efforts was encouraged. By the 1990s 3M had over 30 important technologies. It also had decentralized units each focusing on important product areas. It formed the Health care Group which spanned over divisions related to health of which one was Medical Surgical Markets Division. This decentralized approach was followed in case of product teams which were free from the official bureaucracy and consisted of technical persons along with a process engineer. Most of the successes of 3M in terms of winning products have primarily emanated from their ‘understanding’ of the problems customers face and thereby introducing innovative solutions/products to address these problems. But later on, especially in the case of some health care unit products, it took a long time between product concepts to actual launch. Though these products were successes in terms of innovation and excellence yet slow launch of further new products meant slower growth of revenue and decreased profit for the company. Also the fact that some products in spite their being of high quality faced virtual failure as they attracted a price premium which the market was not ready to pay. The crux of the problem was identified to be the fact that 3M’s process of market research was not giving desired insights which otherwise would have guided the company in selecting the appropriate ‘marketing mix’ of proper product, price, promotion and placement. Lead User research process and traditional market research process Lead Users are those who feel the need of a product or product features much before anyone else in the market and look for innovative solutions to these problems. The Lead User Research concept evolves from the premise that if these lead users could be identified then it would give the research process much needed fillip as it would be able to identify future needs in the present thus augmenting the process and chances of a successful product launch. Whereas traditional research method starts with identification of the problem itself by the research team or by the management of the organization which has assigned the research to the team. The Lead User research process goes through four steps. At the first stage, the project is planned and the company decides its primary objectives i.e. whether it wants to create a new product or add innovation and differentiation to existing products or product lines. The experts also try and get a feel of the prevailing trends in the market by interacting with industry insiders, customers and others. The second stage deals with indentifying the most significant trend in context of needs. Workshops are held at the end of which the “customer need” which is to be satisfied and addressed by the new product is framed. The next stage deals with generation of the basic or preliminary concepts through a deeper understanding of the needs, indentified previously. These concepts are then tallied with expert opinions to understand their business potential. The fourth stage involves the generation of the final concept through a focus group interaction of lead users and different required experts who investigate the concept from different feasibility perspectives. Then the ultimate commercially viable concept is finalized (Dundon. 88- 93). Traditional market research on the other hand generally goes through seven steps. At first the problem is defined and then the source of data to be collected and research procedure is set. The next step deals with sample design which means what kind of sample should be chosen for the research; should it be random sampling or any kind of systemized sampling. Then it is time to collect the data in conjunction with methods previously decided. The next step involves analyses of this data and preparation of the final research report. The traditional research process is also a step by step method which could provide better results if used in combination with the concept of lead users. This would mean that rather than defining the problem themselves the traditional research team could depend upon the lead users to identify the problem or need areas. Then they could move onto the following steps based upon the insight they have gained out of the lead users (Chapter 4: Market Research). Evaluation of success of the Lead user research process The lead user research process’s basic premise starts from using the lead users, the people or entities who have indentified needs and the wants in context of a product or service, much before anyone else has done in the market. 3M wanted to leverage this process to come up with innovative products. At least at the initial stage 3M’s objectivge was to come up with products which offered solution to certain problems which would be identified by the lead users. 3M followed all the usual steps of the lead user research process customarily from the beginning. In the project planning or the first stage 3M built a database of important information pertaining to causes of surgical infections to gain useful insights. Then they moved onto the second stage and identified the ‘needs’ to be conformed to. The product should have ease of use and should conform to the body and be more effectual than the prevailing products in the market. But 3M faced some problems in identification of lead users as was evident from the fact of their choosing the US Mobile Army Surgical Hospital or MASH in Bosnia, which did not turn out to be a lead user. MASH did not predict or understand the concerned problems regarding surgical contamination beforehand unlike actual lead users. But again the other lead users chosen at this stage were useful for the research process. In the next stage, 3M concentrated on generating the preliminary concepts. But again, at this stage there were certain short comings as the company found out that they had only concentrated on the local market in the US when they should have gathered lead users from around the world, including the developing countries. The reason for this being, 3M wanted to focus on these markets also for its products. 3M lost valuable time in continuing research in these faraway places over and above the usual time needed for the third stage. In the following stages the team came up with three product concepts which were: ‘economy line’ which was cheap in terms of cost and was meant for the developing countries, the ‘skin doctor line’ which was a portable handheld device and was extension of an existing technology of 3M and finally the ‘armor line’ which would focus on infections through blood, urinary and respiratory tracts. But at this stage a problem arose when the team suddenly realized that in addition to these products it would be better if a completely new approach to the problem of infection during surgery is used. This revolutionary concept dealt with the approach which focuses on precautionary measures which would stop infections from happening in the first place. This is known as upstream containment and its inculcation into the company’s business process needs amalgamation of different departments of its medical unit. This new idea was seen as a divergence from the initially set brief of the research project and naturally created confusion in the team. The company also did not have all the technological knowhow which was needed to pursue this revolutionary concept. So it is observed that 3M had followed the lead user research process broadly but had some divergence from the usual path which created a certain amount of perplexity. Viable recommendation, risk to lead user process, risks to medical surgical business unit The lead user’s surgical team should recommend the three products to Dunlop. The three product lines i.e. the economy, skin doctor and armor line. These three products do have business prospects as they cover a wide range of the market need or the probable future need. For example, the “economy line” takes care of the poorer developing economies like India. Whereas the “skin doctor line” takes care of the portability factor and thus provides opportunity for growth in areas of travelling ambulances or portable clinics. The armor line on the other hand covers a broader area in context of infection from and during surgical procedures as it takes care of blood borne and other infections through the urinary and respiratory tracts. But the ‘revolutionary’ concept of ‘upstream containment’ should be left for now as it becomes quite risky for 3M to put in resources in it. Moreover this risk arises from the fact that the required level of technical knowhow and skills was not present in the company and to indulge in the new concept would have meant bringing together of newer technology, departmental knowhow, which would be a cumbersome as well as expensive for 3M. Again Dunlop was not in favor of increasing operational costs and therefore recommending the three product concept would win his support which is instrumental in the proper functioning of 3M. The risks involved for the lead user team could emanate if the products recommended by it are unable to find a market or there are some faults in its marketing mix. As in a previous case one of 3M’s products did not sale much as it demanded a price premium which the market was not ready to pay. The success of the medical surgical business unit depends upon the success and the proper execution of the recommendations by the lead user research team. If these recommended products are a success in the market then it would increase the revenue flow and thereby the profit of the company. Otherwise, the problem which the unit has been facing for a major part of the 1990s i.e. slow launch of new winning products would persist and that would be detrimental for 3M. Citations Chapter 4: Market Research. No Date. University of Montana. 20 May 2009. < www.business.umt.edu/faculty/mohr/NewPrinciples/Powerpoints/Ch4.ppt>. Dundon, Elaine. The Seeds Of Innovation: Cultivating The Synergy That Fosters New Ideas, 2002. AMACOM Div American Mgmt Assn. Read More