Latest research shows that while new concepts have not been depleted, unique, original, and untapped ideas are however getting more expensive to find, which is a big problem—MIT Sloan School of Management. Drawing parallel to businesses, a similar challenge is encountered in product innovation. As products reach the peak of the life cycle and growth begins to stagnate then decline, there’s only so much an organization can innovate organically once product features have been “maxed out”. Traditional product life cycle management wisdom suggests that one way to spur the next growth cycle is to increase investments in research and development (R&D); but as the finding above illustrates, this proposition will eventually become too costly to be sustained. Moreover, most small and medium enterprises do not have the required resources to invest into meaningful R&D in the first place, leaving them trapped in a status quo cage.
Click on the image below to read the full research finding.
This suggests that new approaches to product innovation are necessary. Last week’s article: A Lesson from Social Science that Businesses should Take to Heart, showed that existing data that were designed for one purpose could and should be repurposed, for example, in product innovation. Businesses could also adopt an open innovation approach, i.e. sharing knowledge and ideas with non-competing organizations to develop new offerings. Both approaches to product innovation are equally accessible to large companies and SMEs alike; however, both approaches require data-driven insights derived from marketing and sales. With increasingly more data becoming available, businesses can afford to be more creative with their product innovation processes; it is critical for businesses of all sizes to establish robust digital competencies, if they haven’t done so already.