Smart devices with microprocessors at their centre can be found almost everywhere. We can talk and share information with people on another continent in the real time (and for free). Thousands of new websites offering new services are being launched every year.
Many companies see this wave of innovation-based growth, and are interested in developing new products based on these technologies. On average, new products bring more added value to manufacturers, and help increase profits as well as the value of the business. Developing new technologies brings the best returns on investment, which creates an entire ecosystem of venture capitalists seeking investment opportunities in the technology sector. A successful company can increase in value by several hundred percent or more. Governments also spend huge amounts of public money on innovation, trying turn innovative ideas and technologies into lucrative products and services.
Yet the IT world is full of bright ideas which didn’t turn into wonderful products. Only one in seven development projects is successful. “If it’s so simple, why’s it so hard?”. Let’s take a closer look.
The early to middle stages of developing innovative technologies are often performed at universities or research institutes. They receive the largest funding, and are supposed to be the cradle for all kinds of new ideas. But practice shows that the problem is usually the gap between the lab and the real world. Developing a technology to produce a prototype that works in the laboratory is only a first step on a long journey of making a product. Taken as a whole, this stage accounts for about 8% of the total cost.
While a development is being performed by researchers at universities, it’s good to remember what’s interesting for the team working on it. As long as the project is at a stage when the physics needs to be understood and then implemented in the lab, it really is attractive, because the original research results can be published in scientific journals – something of paramount importance to university employees. However, once the lab prototype is ready, the next stage – industrialisation – is a long, tedious, and costly process. It consists of many actions, such as intensive testing in an increasingly complex environments (lab, test rig, and finally in the field). Typically, products must be re-designed, sometimes more than once. Finally, a successful product must meet numerous additional requirements, e.g. norms, manufacturing and service. Oh, and it must be price competitive… All these activities are not interesting for university researchers, yet they form the main part of the total cost (over 90%).
Who should then do the new product development? Few models exist, but I’d like to present the benefits of a model where such activities are outsourced to a specialised company, whose core business is product development. If a company which wants to develop the technology (let’s call it the end-user) doesn’t have its own R&D department, or its existing one has a different profile or is overloaded, or it would require too long learning curve to master the required skills, it needs to look for a partner. The natural partner is the university, right?
Now, the university has many smart people and well-equipped labs. It makes it a perfect partner for project consulting. If a customer has a well-defined question and needs definitive answers, it’s a good place to go. But if the goal is to have a developed product, accompanied by warranty and short response time from a supporting technical team, here is where we need a third player. Have a look at the interactions on the diagram below.
The perfect player is the specialised research firm with a focus on innovation. Often it can be a start-up, especially if the goal is to commercialise a single idea. More often, these are well-established companies with experience in the process of new product development.
If such a company executes a standard order from the end-user, it’s called ‘business as usual’. It’s a well-defined process, with a set of standard documents, such as a request for proposals (RFP), purchase order, and so on. However, the really interesting things happens when all the actors are involved, and one gets to the centre of the diagram. This is where the real need from the end-user meets the technologies coming out of academia, and the two are bridged by the innovation company. Here’s how real new technology development can be achieved. Note the one pitfall in the diagram; if end-user requirements aren’t taken into account seriously, the whole of the work gets done between the university and the innovation company. If this process is accelerated by a government grant, be very careful not to waste money!
The innovation company, needs to achieve one more important skill – it should be able to understand and to talk to people from industry and academia.
This should be the cornerstone of the company culture. In other words, universities need people who like to build prototypes, who are continually asking “can it be done?” and “what happens if I do that?”. They learn by nurturing nascent technologies; their objective is to understand the world. The people in industry, on the other hand, need to hit their sales targets; they need proven solutions and ask the question “should we do it?”. They need to do the job right the first time; their objective is to deliver a solution. The ‘man in the middle’ needs to be bilingual, indeed.
There’s one more enemy of innovation – the bureaucratic state of mind. To fight this enemy, one needs to be an open-minded entrepreneur, who’s not afraid to take on new challenges, while still being able to weigh the many options offered by different design solutions. The innovation company needs people who want to climb mountains that no one’s climbed before. They need to try many paths, but should be ready to change to a better path, if proven so.
For anyone interested in developing new products, there is one motto: If you really want to do something, you'll find a way. If you don't, you'll find an excuse.