From Good to Great: Innovation in Consumer Electronics
By streamlining and extending the innovation process, a consumer electronics giant develops pipeline of breakthrough products
A leading consumer electronics company had enjoyed impressive growth over the last decade by excelling as a “fast follower.” But the company recognized that future success would requirebecoming the leading innovator in the industry. We worked with the client to diagnose its needs. Historically, innovation had been led by technology teams in the business units (BU); marketing and sales groups were brought in later to help execute. As a result, cross-BU collaboration was stifled, innovation processes were inconsistent and often sub-standard, and the process yielded only incremental improvements rather than breakthrough innovations. We helped the client develop a multi-year transformation plan. It included specific goals for margins and profits and laid out a clear, detailed vision to become the leading innovator of consumer electronics.
Working closely with top management, we analyzed the company’s innovation “fingerprint”—that is, its performance relative to its peers on critical dimensions such as process, organization, and culture. Based on the company’s aspiration to lead the industry, we analyzed current strengths and weaknesses and developed a blueprint with five intersecting pieces:
- setting an aspiration and strategy
- discovering actionable market insight
- embedding new innovation processes
- mobilizing the organization
- extending open innovation networks
Setting an aspiration and strategy
It was essential that the entire organization understand and support the new innovation imperative. The CEO also wanted innovation to complement the other pillars of its corporate strategy: globalization, go-to-market excellence and brand repositioning. We worked closely with the CEO to craft a stream of communication and employee interactions for every level of the organization. Simple, clear messages conveyed the need for change and how success would be defined and measured. These messages were syndicated with senior executives, and then “cascaded” throughout the organization using several innovative channels including a CEO blog and internal bulletins.
Discovering actionable market insight
Putting the consumer at the heart of the new approach to innovation was critical. The CEO wanted the company to pay closer attention to what consumers were saying (and not saying) about its products. Consumer data were analyzed to detect and exploit disruptive shifts in consumer preferences. These new insights were then used to develop new products, services, and business models.
Embedding new innovation processes
We helped redesign and streamline the innovation process from the bottom up, so that it became easier to move winning ideas along quickly, and to winnow out the less promising. We also piloted a new way to create breakthrough innovation based on Burk’s proprietary Insights to Action approach. Pilot teams prototyped the new process, from defining the strategic “where to play” choices, to conducting ethnographic research, to developing and presenting business cases for the best ideas to a senior executive team. This process was refined and then rolled out to innovation teams across the company, who then used it to develop a robust pipeline of electronics products.
Mobilizing the organization
To sustain the new process, we helped the client rethink its organizational structure, including integrating innovation planning and investment into core processes, and introducing regular “innovation reviews" with the CEO. We established a central “lean” team to:
- support innovation in both the corporate center and the businesses
- ensure consistent processes
- facilitate sharing across groups
- provide coaching to teams in BUs
Critically, this central team also played a role as an internal “incubator,” and quickly helped some of the businesses rise above their daily operations, creating five cross-functional teams to support the goal of innovating as part of daily work. We also helped design performance indicators so that the company would know when the new system was working and when mid-course corrections were needed.
Extending open innovation networks
To ensure that the company incorporated a broad range of thinking, we set up an open innovation network to tap into new and promising ideas from the venture community This included a strategic venture investment group with offices in Israel and Silicon Valley. We also launched a global business plan competition, which received more than 4,000 business concepts from across the enterprise. The competition helped to generate and identify new ideas, and reinforced the importance of innovation throughout the company.
The company now has a pipeline that includes ten breakthrough products in development. Several have the potential to reach $1 billion in sales soon after launch, an aspiration that has become a commitment to investors. The company has rolled out its new innovation process to all its labs worldwide. And its new incubator team, charged with collecting and generating insights, is now leading a strategic process to manage its investments in innovation.