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The Integration of Innovation and Marketing Best Practices for Business Excellence III

Written by: Phil Allen

Article Overview: During an economic down turn marketing and particularly funds for innovation and growth are amongst those hardest hit. As new, profitable innovations are owned by marketing, whilst their financing comes from the ability for the current business to generate profits, there is an intimate link between marketing and innovation. Considering current business and innovation as distinct silos, managed in different ways by separate functions, may mean that the organization is missing a significant opportunity to maximize the skills, knowledge, resources and networks of the organization. Innovation Expert, Kevin Weir and Marketing Excellence Practitioner, Phil Allen explore how companies can keep their marketing and innovation machines turning even in tough times by taking a more integrated approach.

The Integration of Innovation and Marketing Best Practices for Business Excellence III

An Example of Marketing and Innovation Integration

Profitable innovation and marketing management are both dynamic processes of continually creating new business models, improving customer experience, and opening new markets — as well as launching new products. To support value maximization and accelerated innovation Pentadigm ® Customer Value Management and Rapid Innovation’s; “Innovation Management Cycle” are examples of how marketing and innovation best practices integrate.
Pentadigm® Customer Value Management
Understand the Customer
Commit to the Customer
Create Customer Value
Obtain Customer Feedback
Improve Customer Value

The Innovation Management Cycle
Discover
Ideate
Stage Gate Development
Post Launch Review - Continuous Improvement
Portfolio and Life Cycle Management

The models both show how typical activities undertaken by marketing teams give plenty of scope to leverage teams and research gathering and analysis activities to manage value and innovate simultaneously. If managed well, customers will take time with marketing and R&D teams to uncover needs, the root causes of problems, unearth satisfaction gaps and develop solid reasons for a new product or service.

Marketing and Innovation Connectivity – An Example. Pentadigm® and “The Innovation Cycle”

Below we compare the activities of the two models, demonstrating clear parallels.

Customer Value Management 1. Understand the Customer
Understand markets, value chains and customers, discover customer need and value-based segmentation, quantify customer need and value, evaluate competitive positioning, select and target customer segments.

Innovation Management 1. Discover.
Research customer and market needs. Identify satisfaction gaps by using advanced Voice of Customer research methodology, trends and technology mapping. Gain deep insights into markets opportunities and satisfaction gaps that lead to opportunities to innovate.

Customer Value Management 2. Commit to the Customer
Develop customer segment strategy, differentiate offerings (customer commitments) to chosen target segments, communicate offerings internally and externally – ensure full understanding within the company and throughout the target customer base, define and measure key performance indicators.

Innovation Management 2. Ideate
Validate insights with customer to create opportunities. Leverage knowledge and creativity. Understand how customers measure the improvement an innovation can bring. Ideate around these opportunities using idea management and creativity tools, leveraging internal and external teams. Develop first pre-concepts or "protocepts" and gain customer feedback and interest.

Customer Value Management 3. Create Customer Value
Develop a customer culture throughout the organization led and driven from the top, define and populate customer value processes, develop customer value infrastructure, implement customer value creation.

Innovation Management 3. Stage Gate Development
Create customer culture through integrating the customer throughout the Stage Gate NPD development process. Continuous or dynamic prototyping will ensure faster low risk developments and customer buy-in to the innovation. Integrate customer into pre-launch activities to improve intimacy and help problem solving.

Customer Value Management 4. Obtain Customer Feedback
Track won and lost business, proactively obtain customer feedback from formal and informal sources, measure and track customer satisfaction, loyalty and retention, manage customer queries and complaints.

Innovation Management 4. Post Launch Review
Track delays, additional costs, functional and product deliver issues. Brainstorm solutions to improve the root causes that led to the issues. Manage and implement solutions. Suggest further opportunities for teams to innovate. Process creates significant good will and bonding between internal and customer teams.

Customer Value Management 5. Improve Customer Value
Implement short term improvements, discover and implement continuous and ongoing improvements to customer value, challenge and improve customer understanding, re-define customer commitments, strive for sustainable differentiation, improve customer value creation and streamline implementation.

Innovation Management 5. Portfolio and Life Cycle Management
Strategy, resourcing, balanced decision-making. Continuously review the relevance and value of the portfolio in relation to company strategy, trends, competitors, new technology, changing customer needs and potential for a disruptive innovation. Discontinuing low volume and non value-creating offerings frees up precious resources to fund and support innovation.

More in depth research using advanced Voice of Customer techniques such as “Job Mapping” across the value chain will uncover a multitude of opportunities for higher value improvements through more innovative new offerings. The greater knowledge and close customer interaction through the ideation and Stage Gate development process the better marketing and R&D can manage the risk associated innovation investment and new product launch. In all cases, teams should be well aware of the business strategy and goals in order to tune their “radars” to activities that will excite top management. Without focusing their innovation radars and applying good VOC techniques, teams may miss the chance to delve deeper into issues and needs to first understand fully the situation. And without a good grounding in innovation best practices, teams may be unable to turn these insights into opportunities for creative, collaborative ideation and potential project developments.

Tackling the issue of innovation risk, marketers can mitigate those risks by studying how risky projects are statistically, and balance the portfolio between Big “I” breakthrough innovations and “little i” incremental innovations. They can also ensure the use of current best practices and productivity tools to research, ideate, screen, rapid prototype and efficiently manage the chosen projects through a robust Stage Gate process.

New Productivity Tools

Of particularly interest are emerging I.T. systems for innovation management, such as Innovation Framework Technology’s Front End of Innovation (FEI) Idea Search Engine and Management tool, and it’s “back-end” integrated NPD Staged or Gate development process, with portfolio and lifecycle management features.

Such enabling I.T., linking and integrating the company’s total innovation initiatives to current best practices have been shown to deliver maximum speed and efficiency at lowest risk and cost and can make a significant improvement on both productivity and Return on Innovation (ROIV).

In Conclusion

Marketing and Innovation management are inseparable and integrally linked to business success. Why, then, do so many companies keep these activities separated and segregated into different silos?

Now is the time to bring together these interrelated activities into an integrated Strategic Marketing and Innovation group with the remit to optimize the current business for profit and to steer the company to the right future opportunities.

In both cases the need is for a detailed and in-depth understanding of the market value chain, business and competitive environment and a strong focus on customer needs and value drivers, led from the top and driven by senior management down through the organization.
Ideation and creativity must be encouraged and allowed to flourish as the company seeks to differentiate itself from competition with new offerings, new business models and new marketing approaches.

Key tools used in Integrated Marketing and Innovation Management are:
Customer Value Segmentation
Market Value Chain Analysis
Voice of the Customer
Job Mapping
Stage Gate NPD
Customer Commitments and the 4R’s of Sustainable Differentiation

Vital is the introduction and leadership of a customer value culture throughout the organization.

®Pentadigm is a registered trademark of GEMS Europe GmbH

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Article Tags: business models, competitive positioning, customer need, customer research, customer segments, customer value management, dynamic processes, innovation cycle, innovation management, life cycle management, management cycle, marketing management, rapid innovation, research methodology, service marketing, stage gate, technology mapping, typical activities, value chains, value maximization



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