Companies create products with their needs in mind and not those of the customer.
This may occur as a result of poor communication between departments, excessive competition between them, or a very rigid structure that does not allow them to efficiently integrate innovation processes.
An article in the magazine Harvard Business Review, September-October 2018, ‘Reevaluating Incremental Innovation’ explains this problem in large companies. In addition, they set out the advantages that small businesses have in this respect.
At too many companies, R&D is looking in the mirror at itself instead of looking out the window at consumers. The scientists are doing their own thing, without a focus on achieving commercial value. That’s one reason small companies are winning a market share. Big companies can still grow, but they need to focus on categories where they can win, create cross-functional, entrepreneurial teams, and become far more agile in their execution.
Innovating for innovating
There is also the belief that innovation should be on a large scale every year. As a consequence of this, the focus is lost on the objective of innovating. This goal should be to satisfy an unsatisfied need in the consumer. However, the companies are dedicated to launching products that are not very differentiating. Because of this, the culture of innovating for innovation’s sake is created.
By creating the needs of a given market niche in mind can also result in an innovative product that is scalable over time. According to Mark Dziersk, in his article for McKinsey & Company of September 2018 ‘From lab to leader: How consumer companies can drive growth at scale with disruptive innovation’ this undermines the standard model of packaged goods companies to innovate for the masses.
There is a prevailing myth that consumer companies need to do a few big launches a year. Even if that were once true, it no longer is. This approach required large R&D investments, extensive consumer testing to validate willingness to purchase, and massive resources.
This mentality assumed the resulting product could not fail once it hit the open market. However, our findings suggest that putting all this effort and funding to drive a successful launch has not actually provided the desired results.
Hence, the need to focus innovation on customer needs. Companies with small innovations have succeeded only by being in tune with the market. There are many examples of companies with such strategies, such as Heinz, with its bottles stored upside down, or Reckitt Benckiser, with more functionalities in its Finish dishwasher detergents.
If you are interested in knowing more about the other mistakes, in the following posts you will find each of them explained in more detail: