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The big idea – innovation and NPD series Part Two


The big idea – innovation and NPD series Part Two


Part One: Necessity is the mother of innovation
Part Two: The big idea (this article)
Part Three: Building the product
Part Four: Launch


In the second instalment of Marketing‘s series on innovation and new product development we focus on the ideation stage – an area that a third of our readers say is the biggest challenge they face bringing new products to market – and break down methods for approaching it. 

When Air New Zealand sat down to rethink the appeal of its long-haul offer, it looked across different transport modes to find cues about how people like to travel. What it found was that some people think of an extended trip as a time to be social, while others would rather keep to themselves. Mindful that the majority of its long-haul flights run overnight, and on average 90 minutes longer than any other airline, it introduced two new seating arrangements.

In economy, the airline launched the Skycouch, or ‘Cuddle Class’, a specially designed row of three seats with a lie-flat space that lets couples and families lie down like they would on their couch at home. And, in premium economy, it introduced the Spaceseat in two variations – one for individual travellers preferring solitude and another so that couples could turn to face each other during the flight.

In May 2011, the Skycouch took top honours in the aviation category of Condé Nast Traveller’s 2011 Innovation and Design Awards, beating Singapore Airlines’ new first class A380 cabin. With the help of innovation agency IDEO, the airline focused on unmet consumer needs, creating new and differentiated products that travellers loved.

Cuddle Class

It is this step in the innovation process – the ‘front end’ or ideation stage – that we will focus on for the second instalment of Marketing‘s innovation and new product development (NPD) series. The remainder of our investigation will focus on the specific challenges marketers face throughout the different stages of the innovation process, by breaking it down into the front, the middle and the back.

The front end of innovation

Dr Scott J Edgett, an internationally recognised innovation expert and co-creator of Stage-Gate, an innovation framework used by many of the world’s biggest brands, says the front end, or the idea stage, is where the highest risk lies. But it’s also the stage most commonly shortcut. “It’s interesting that the area with the highest risk is also the cheapest part of the process,” says Edgett, highlighting companies’ willingness to skimp on investment in the front end, often to their detriment.

Big companies have become skilled at the middle and back end of the innovation process – the product building and commercialisation stages, according to Edgett. But they do not excel to the same degree at ideas. “It is at the front end where we see the real change and challenges… companies are saying ‘We haven’t got enough good ideas coming in’.” With such intense competition and the maturation of many categories, good ideas are becoming harder to come by. Yet without them successful innovation cannot occur – no amount of testing or refining can make a bad idea good.

Stage GateThe front end is where the inspiration for the new product is found, and assessed for its viability. It includes tasks such as brainstorming and discovery, market analysis, matching to corporate capabilities and preliminary financial and business assessment. It poses a number of challenges, from understanding consumer insights and finding great ideas to accurate and early project selection.

Failure to understand and adequately respond to unmet consumer needs, or inadequate market analysis, was nominated as the number one cause of new product failure by several of Marketing’s sources. Because identifying and qualifying genuine growth opportunities is challenging, many companies leap from high-level ideas to concept development. It’s not that they ignore category assessment overall, but the urge to ‘innovate’ often leads to a compacted process that skips necessary steps. When the front end is left incomplete, the bridge between consumer need and product often fails to meet.

Innovation that invests significant time and resources into the front end is inevitably more successful than that which doesn’t. If steps are to be skipped, ensure the rigour of the process matches the complexity of the innovation being conducted, Edgett advises. “If it’s a high risk, highly complex project, do it through the typical five-stage [Stage-Gate] process, but if it’s just a tweak or an innovation, you need to go fast to market. Have you streamlined your process to match that?”

A slave to the customer

“A slave-like dedication to the voice of the customer” is an integral part of the new product development process, according to Stage-Gate’s research. Innovation that has a strong consumer focus enjoys more than double the success rate of innovation that doesn’t. Despite this, a strong market orientation and customer focus is absent from many businesses’ NPD projects.

Idea generation based on consumer insights or input is a constant presence in Arnott’s innovation pipeline. Regional marketing director at the snack food manufacturer, Susan Massasso, says market interrogation is a daily reality for her team – something they live and breathe. “We have extensive brand planning and processes that interrogate the broader marketplace opportunities and where we want to take our brands… we are stepping in and reviewing with consumers, with shoppers, with customers when we bring things to market.

“But we’re also really clear that consumers aren’t necessarily going to give you all the answers either,” Massasso adds. “We work very closely with our insight partners to also read between the lines and develop things that we have built upon in previous years.

“The power is in how we, as people that thoroughly understand our brands and the categories and the marketplaces, apply this insight in order to bring the innovation to market and be ahead of the game, rather than just retrospectively in the game.”

Junk in, junk out

“How much would I spend to get one idea that I could actually launch where I can make $300 or $400 million a year in revenue?” a marketing executive asked Edgett rhetorically. The implied answer: a lot of money.

The critical task of unearthing an idea that has legs is becoming an increasingly difficult feat. No matter what’s launched at the back end, if it came from a bad idea, it’s not going to sell. If it’s junk in, it’s junk out.

Innovators spend millions of dollars on insights and identifying ‘white space’ – opportunities made up of needs or demands, which can often be latent, not currently filled. Research organisations and consultancies have tried and tested techniques for finding white space, which package together a range of ideation approaches.

Nielsen has ‘Market Brand Adviser’, which determines the drivers of categories and seeks to understand how each brand is performing against those drivers. It screens ideas through to concept refinement using qualitative and quantitative approaches, Andrew McQuillan, vice president of innovation for Nielsen, Pacific, explains. “Concept development is often assisted by qualitative work to, in some cases, come up with concepts from ideas, and in other cases to refine concepts. We’ve incorporated factors of successful products into our qual interviews, so that we’re asking questions that improve the odds of success once we start doing the quantitative work.”

TNS has ‘Matrix’, an approach that identifies, sizes and prioritises growth opportunities based on consumer needs. Ray Crook, regional director of innovation and product development, Asia Pacific, at the research firm, says there are five ‘drill sites’ investigated for new ideas: the normal ‘friction life tensions’ that people have, core category needs, usage occasion needs, convergence and breakthrough innovation opportunities. The focus is turning back to breakthrough innovation as confidence improves, Crook notes, but it is hard to deliver on. “It’s bringing the polar needs that consumers have together. A classic one would be health versus taste within snacking.”

Edgett says the techniques companies are using to help generate ideas and turn consumer insights into something tangible to the product development team are changing rapidly. “It’s tough to constantly come up with a new idea, the techniques they’re trying are different, and they’re trying all sorts of different techniques in the hope some of them will work.”

Idea detectors: which techniques work best?

In 2010, Stage-Gate concluded analysis on a study of ideation techniques used by 160 US firms, sparked by earlier findings that only 19% of businesses had proficient ideation processes. Eighteen different sources of new product ideas were investigated, including eight ‘voice-of-customer’ techniques, six open innovation approaches, and a handful of other internal and strategic approaches. The study found voice of customer methods delivered the best ideas, while open innovation yielded disappointing results and the range of other techniques were suited to niche situations only. It also revealed that while some methods were used extensively, notably focus groups and studies of early adopters, others such as ethnography or co-creation communities were less popular despite proving to be more fruitful sources of ideas.


Ethnography was found to provide the deepest insights into users’ unmet and unarticulated needs and is a powerful source of breakthrough ideas, the study found. The approach involves ‘camping out’ with consumers in their natural setting for extended periods of time, watching and probing as they go about their everyday lives. The depth of knowledge that can be gained is unrivalled by other techniques. It is, however, time consuming and expensive to undertake, and also subject to the skill of the researcher or observer. If observation or interpretation skills are lacking, its accuracy can be compromised. A scaled-down version of ethnography – customer visit teams, where cross-functional teams interview customers – also emerged from the study as an under-appreciated approach.

Focus groups

The stalwart of qualitative research, focus groups are still widely used and a fruitful source of ideas. They often involve projection techniques to draw out the true drivers behind wants and needs. Inverse brainstorming – starting with product shortcomings, then brainstorming to propose solutions – is also a tried and tested methodology for ideation.

Lead-user analysis

Analysis of ‘lead users’, or early adopters that have been identified for their ‘future shaping’ proclivities, can yield innovative product ideas. It was an effective and popular technique among the firms studied, credited for uncovering ideas for people who are ‘ahead of the wave’. The major challenge with its use is in identifying lead users, getting them to participate and structuring the research.

Communities/ co-creation/ crowdsourcing

Online communities, virtual focus groups and crowdsourcing approaches have become widely used techniques. Qualitative research conducted online has a number of benefits, including cost and logistical efficiencies, the ability to use multimedia content as stimulus and a digital research environment where participants are usually more candid. Its useful application depends on the aims of the project and the participants recruited to take part. The panel recruited to take part can be made up of lead users, population representative groups or brand/category enthusiasts.

Researching enthusiasts can be a double-edged sword.While leveraging their passion for the brand or category can deliver great results, their engagement with the topic can lead to biased results.

Crook advises being targeted with co-creation and clearly defining to participants where the opportunity fits. “Co-creation is a good way to get ideas from consumers, but they need to be harvested in the right way. You need to ensure that you’re co-creating around areas where there is a space. We might get there and say, ‘Let’s go out and co-create a light tasting beer.’ But we need to understand if there is a gap in the marketplace first.”

Generally, the effectiveness of community approaches was rated highly in Stage-Gate’s research. They can be set up to be ongoing, similar to traditional customer advisory boards, but their running costs are low. A key challenge is, while this method comes with its efficiencies, it requires considerable skill, insight and time to analyse what is often a large amount of written responses.

Open innovation

Open innovation opens the doors of the organisation to ideas, technology, intellectual property and even fully-developed products to outside sources. In spite of the hype about this approach, open methods aren’t proving particularly popular, according to Stage-Gate, nor are they perceived to be particularly effective

as sources of new product ideas. Out of six open innovation approaches investigated, the three most effective were ideas from partners and vendors, ideas from the external scientific community and ideas from start-up businesses. None, however, proved to be as effective as voice-of-customer methods, possibly due to their newness. They have potential, however, by virtue of their access to a wide array of parties – a ‘brains trust’ of experts beyond the ability of the standard organisation to employ.

The open approach is one that IDEO has thrown itself into, according to its chief creative officer, Paul Bennett. The agency was contracted by the Queensland Government in 2011 to find solutions to the gap between rural food production and urban food consumption. An open challenge was posed at last year’s Ideas Festival to create a closer connection between local food production and consumption and improve sustainability. Concepts were then gathered together to input into the development of solutions to the challenges.

A major disadvantage of the approach is the sheer amount of time and work it takes to scan, solicit, handle and process the ideas or intellectual property. “It takes an army of people,” one of Stage-Gate’s respondents indicated.

Other methods

Top-down or strategic approaches to innovation have proven fairly popular over the years and include two methods: exploiting disruptive technologies and ‘peripheral vision’. Both emerged in the research as widely used and effective idea generation techniques.

Patent mapping and mining is also well-known and quite popular for identifying areas of competitor activity and hence potential areas of focus. Many firms engage in this activity to stay across what competitors are doing, but the approach is a reactive, rather than proactive, generator of new ideas.

‘Internal idea capture’ – formally soliciting new product ideas from your own employees – was the most popular ideation method in the survey, but its effectiveness was found to be disappointing.

The front end of the innovation process is the most important step in the journey; it’s the foundation upon which the project is built. Executing the first stage of developing a new product is a matter of formalising the search for a big idea, while doing background homework to assess its viability and listening to the voice of the consumer every step of the way. Nearly all of the best performers have a game plan and use a structured approach, such as StageGate. Innovation is integrated into the culture of their organisations, aligned to their corporate strategy and effective portfolio management ensures the right mix of innovation projects is put together.

With incremental innovation reaching near exhaustion, the hunt for bigger and better ideas is a top priority. Taking a big idea and making it a reality – like Air New Zealand did by making it possible for passengers to lie down in economy – requires a strong focus on, and respect for, the front end of innovation.

In Part Three of this series on innovation and new product development we get stuck into the middle – where things really start to take shape. For now, see our ongoing mini case study into how Kimberly-Clark approached the NPD process below.


Viva wiping


The cleaning category is a high frustration category and one where little innovation has taken place in the past five to 10 years, according to Lisa McKee, marketing manager for VIVA towel and cleaning products, Kimberly-Clark.

The paper product manufacturer brought a ‘blue sky’ shower cleaning product to market, adapting supply chains and manufacturing processes to incorporate cleaning product capabilities in order to meet consumer desire for a simplified cleaning process.

Prior to the launch of VIVA Shower Fast Wipes, over 140 SKUs contributed to the household cleaning market, with bathroom cleaning representing 12% of this group.

With the segment declining at approximately 4% each year, Kimberly-Clark identified a clear need to revitalise the segment to not only offer consumers a better and cleverer alternative to clean their showers, but also to drive value and incremental volume in the category.

Consumer research uncovered that the task of cleaning the shower screen is one of the most dreaded household chores. Three in five consumers believed they didn’t have a satisfactory solution for soap scum on the shower screen and tiles. They desired cleaning products that are easy to use and that allow them to fit cleaning into their busy lives. Many found the sprays, cloths, scrubbing brushes and need to change clothes put them off cleaning the shower and a source of frustration. Trends also showed consumers prefer not to use highly toxic, strong smelling chemicals to clean, and seek convenient solutions that deliver efficacy with ease.

The VIVA Shower Fast Wipes concept was developed to meet consumers’ needs by providing a simple, quick and effective solution to shower cleaning frustrations.

The business case for the idea was strong – there was no cannibalisation potential, as Kimberly-Clark had no existing products in the bathroom cleaning category, meaning all volume would be incremental. Brand equity in the VIVA name emerged as a competitive advantage.


We’ll continue this mini case study in the next part of this series by looking at the journey Kimberly-Clark embarked on to test, refine and develop its breakthrough cleaning product.



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