Aberdeen Summit: Strategy trumps technology as key driver of innovation, author says

Technology and innovation are important, but finding the right strategy to turn that technology and innovation into products that the market wants is even more important.

By Renee Robbins June 5, 2007

Boston—Technology and innovation are important, but finding the right strategy to turn that technology and innovation into products that the market wants is even more important. Strategic thinking was on the minds of industry leaders at the Aberdeen Group’s Product Innovation Summit in Boston May 23. Attendees at the event heard from Aberdeen researchers and industry experts that developing more innovation, and the right kind of innovation, were crucial to success.

“The ability to bring products to market profitably has tremendous room from improvement,” said Jim Brown, vice president of product innovation and engineering research for Aberdeen. “Innovation is important, but innovation that doesn’t fit what the customer needs is less important.”

Author and MIT professor Michael Treacy was more pointed in his remarks to the 200 people in attendance. “There is a glut of sameness in the market,” Treacy said. “You look at the problems of the Big 3 automakers. They didn’t get worse. The market got better.”

Toyota is one of those market forces, and Treacy said there’s a lot of information on the Toyota way, but perhaps less understanding. “There are 50 books on the market about Toyota alone, but do we really understand what they do?” he asked. “If you want to see a high-performing organization, what is at the foundation is the pace at which they are improving. At Toyota, it’s not what they do, but the pace at which they are improving.”

‘Engineers are trained to compromise’

Treacy had a blunt assessment for innovation in the marketplace, noting that product categories ranging from breakfast cereals to cars have suffered from an oversaturation of products without any really new about them. “If you’re not driving customer value, you’re not innovating,” he said. “Engineers are trained to compromise. Innovation is about how to relax compromise.”

Repairing the broken process of innovation will take time, patience and a healthy dose of skepticism. “Product innovation needs a kick in the ass,” said Treacy. “If you want to improve product innovation, don’t take ideas at face value. It takes a very long term commitment. The challenge is on people, the challenge is on strategy, and it’s all about work practices.”

He described that process as “performance management. It’s where the risks for performance have largely been eliminated, and only hard work remains,” he said. “Now how do you make that part of a company’s DNA?”

Yet all the discussion of innovation comes as industry leaders face the basic realities of profitability. When asked informally why product innovation is important to their company, 75% of attendees said it was about increasing revenue. Just 6% said it had to do with reducing costs.

The event, which was co-sponsored by Manufacturing Business Technology magazine, is part of the Aberdeen Summit Series. Summit participation is limited to 200 executive level participants “seeking to hear from and network with industry thought leaders.”

— Reported by Bob Vavra. Edited by Renee Robbins, editorial director, Control Engineering Weekly News