Specialization has created intellectual and imaginative silos in organizations, and a recent Wharton study written up in S+B Magazine
has found that these silos are a huge obstacle
to innovation: "The most effective product development and
commercialization processes encourage dynamic communication and idea
sharing among engineers, marketers, and customers…Failure to
incorporate the customer’s perspective often seriously limits the
potential financial and competitive value of corporate
innovation…Often, engineers are tucked away so far within a company
that they don’t see firsthand what customers really need."
Other key findings of the study:
- over-concentration on technology and under-emphasis of the emotional appeal of products leads to market failure
- better products result when employees are themselves customers of the product
- ‘anthropological research’ — visiting customers to see how
they actually use (and mis-use) products can provide huge insights on
need and innovation opportunities - when entering new markets, having local partners ‘on the
ground’ can help tweak products to meet needs that are unique to that
new market - using cross-functional teams and having the R&D people ‘get out more’ can help reduce ‘customer blindness’
- spreading R&D efforts around the world can help global
companies enhance their ‘environmental scan’ and tap into ideas and
adaptations that may not be apparent at head office - surveys that gather data on customer behaviour are insufficient — it’s more important to know why
customers do what they do, to determine their true wants and needs, and
this usually requires face-to-face contact and collaborative effort to
determine - it’s important to understand customers’ aversion to change, and annoyance with having too many choices, when developing products
- key qualities needed of the facilitators of dialogue between R&D, sales and customers: humility and curiosity
This study focused mainly on new product innovation, but the same need
for collaboration with all the departments of the company, and with
customers as well, applies equally to other types of business
innovation.
Thx Dave for linking me to the study.
2 comments so far
Deciding what to develop is a sorely neglected area of the innovation process in general and companies’ new product development pipeline in particular. I would argue that there is a business process needed for this activity. I call this phase “Definition” and propose Integrated Definition as the business process to manage it. There is nothing mysterious about Integrated Definition, but it requires working in ways that are not common in the early phases of innovation. Briefly, Integrated Definition requires a cross disciplinary team and a combination of research and design conducted in an iterative loop to achieve a well-defined product or service to develop. I believe so strongly in this that my company and academic research agenda are focused on it.
VERY interesting. Please tell us more about this “fuzzy-frontend-stuff” 
Would be interesting to hear about the cross diciplinary team - combination, output, and suggestions for companies in general.
All the best
Hans Henrik