ABSTRACT
Today, as the innovation leaders strive to take the next step in the evolution of this increasingly fast, diverse and complex arena, there are a whole new set of issues coming onto the horizon for many firms. Like mass customization, ingredient branding and total quality management, some of these are being developed first in one sector and will then transfer across to others in the next few years, whilst others are more generic in application from the start. In an increasingly competitive marketplace, leadership in the ability to conceive and deliver groundbreaking innovation is becoming ever more of a core competitive advantage. This latest phase of the evolution of organizations’ innovation capability is pushing new boundaries and challenging firms’ preconceptions across the spectrum, forcing them to re-evaluate some of their core activities and processes and, if need be, reinvent themselves.
Leading the charge are a number of organizations who are very much breaking existing preconceptions and reinventing their respective marketplaces. Following its early success with vacuum cleaners, Dyson is once again redefining the domestic appliance market with its new washing machines and, in an equally mature and saturated marketplace, Smint are shaking up the confectionary food sector. Likewise, eBay and Egg are both leveraging the opportunities from the connected economy to change customer expectations and cause fundamental change in the trading and financial service industries.
With the advance of the Internet as a sales and distribution channel, mass customization of products is evolving into true personalization and delivery of tailored services unique to the 156individual. In parallel with mySAP, myCNN and https://www.FT.com" xmlns:xlink="https://www.w3.org/1999/xlink">FT.com all becoming established for Internet-based personal content and service delivery, Nokia are moving the concept of post-acquisition product personalization forward with the increasingly wide range of physical and software options available for its phones, and, with the arrival of digital TV, fully personalized programming and advertising is now a reality.
An increasing focus on the underpinning needs of customers is similarly driving increased interest in discovering and capturing the values by which purchase decisions are being fundamentally influenced. Led by companies such as Nike, greater psychological and behavioural science input to the innovation process is prompting more and more companies to search for the unarticulated needs that have to be satisfied at the start of projects and to use these as reference points throughout delivery.
The increasing convergence of new technologies, especially mobile communications and PCs is driving companies such as IBM, Dell, Motorola, Microsoft and Nokia to share development and also the supporting intellectual property rights. In contrast to the great video debacle between Betamax and VHS, DVD products are now being developed through cooperation between Sony, Toshiba, Matsushita, Philips, Panasonic et al., while Ericsson, Motorola, Nokia and partners are leading Bluetooth, the new wireless applications standard, which has over 200 companies involved in its development and exploitation.
Driven by the fallout of the https://www.dot.com" xmlns:xlink="https://www.w3.org/1999/xlink">dot.com bubble, an increasingly diverse range of organizations are re-evaluating their core and non-core businesses and looking to a combination of internal and external investment to support new innovation programmes. From early stage venture capital firms to multinationals, the way in which the availability of finance can be used to increase the chances of ultimate success for new technologies, new products and even new businesses is being redefined. From Nestlé and Unilever to Scipher and BTG, companies are using such investment to increasingly beneficial effect.
Enabled by fully integrated networks and processes, firms across several lead industries are collaborating virtually. Collaborative product and service development is increasing cross-industry involvement and further reducing development timescales. Led by Covisint in the automotive sector and c-Medica in the medical device industry, new means of organizing for innovation are becoming a day-to-day reality.
Lastly, organizations are using ever more inventive strategic partnerships to exploit the value and reach of their brands. 157Virgin is the most visible originator of this approach, with its multiple business operations across the travel, retail, financial services and entertainment sectors, but others such as Centrica and Manchester United are moving practice another step forward. In alliance with an ever-expanding range of leading partners, from Nike and Vodafone to MBNA and BskyB, this football club in particular is adopting increasingly inventive value- and margin-sharing propositions to extend its core brand's reach and increase associated revenues.
