By: Dr Suresh Vidyasagar Menon – Chief Consultant & Business Advisory for Six Sigma, Operations, Strategic Management and Information Security & Dr Shwetha Kulshreshta
Although promoting innovation can be a source of competitive advantage, the failure rate of innovative products is high. Research evidence suggests that only 10 to 20% of major R&D projects gives rise to commercial products. It is nearly impossible to know prior to market introduction whether the new product has tapped an unmet customer need, although good market research can reduce the uncertainty about likely demand for a new technology, that uncertainty cannot be fully eradicated; a certain failure rate is to be expected.
One of the most important that managers can do to reduce high failure rate associated with innovation is to make sure that there is tight integration between R&D, production and marketing. Tight cross-functional integration can help a company ensure that:
- Product development projects are driven by customer needs
- New products are designed for ease of manufacture
- Development costs are not allowed to spiral out of control
- The time it takes to develop a product and bring it to the market is minimized
- Close integration between R&D and marketing is achieved to ensure that product development projects are driven by customer needs.
Customers can be a primary source of new-product ideas. The identification of customer needs, particularly unmet needs, can be set the context within which successful product innovation takes place. Moreover, integrating R&D and marketing is crucial if a new product is to be properly commercialized- otherwise a company runs a risk of developing products for which there is little or no demand.
Integrating between R&D and production can help a company ensure that products are designed with manufacturing requirements in mind. Design for manufacture lowers manufacturing costs and leaves less room for error. Thus, it can lower cost and increase product quality. Integrating R&D and production can help lower development costs and speed products to market.
One of the best ways to achieve cross-functional integration is to establish cross-functional product development teams composed of representatives from R&D, marketing and production. The objective of the team should be to oversee a product-development project from initial concept development to market introduction. Specific attributes appear to be important in order for a product development team to function effectively and meet all its development milestones.
Leaders of the organization also must admit their own failures if they try to encourage other team members to responsibly identify what they did wrong and above all top management must bear primary responsibility for overseeing entire development process.
About the Author
Dr Suresh Vidyasagar Menon has 31 years plus of overall experience in IT, around 3 Years in Auditing of ISO 27001-Information Security Standard, has executed 25 plus projects in IT and two turnkey projects for eastern railways (Liluah) and has to his credit 14 publications in International Journals of Science, Engineering & Technology.
