Platt Perspective on Business and Technology

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 13

Posted in business and convergent technologies, strategy and planning by Timothy Platt on May 19, 2018

This is my 13th installment to a series in which I reconsider cosmetic and innovative change as they impact upon and even fundamentally shape the product design and development, manufacturing, marketing, distribution and sales cycle, and from both the producer and consumer perspectives (see Ubiquitous Computing and Communications – everywhere all the time 2, postings 342 and loosely following for Parts 1-12.)

I have been delving into the issues of business process innovation in recent installments to this series, and when it would make more sense to retain these sources of value in-house as proprietary resources, and when it might make more sense to market them, either within closed supply chain business-to-business collaboration contexts, or as more openly available marketable and sellable products, or even as recurringly updated commodities (see Part 11 and Part 12 in particular for that.)

But I have taken a relatively static, timeframe-independent approach to this set of issues up to here, and one that has at most just acknowledged a simplified approach to larger contextual change that this type of innovation would arise and play out in. More specifically, I have assumed and allowed for specific individual innovation-based change events and have considered how they would be evaluated, for how best they would be maintained in-house or shared outside of the creating business’ walls. And I have treated these innovation instances as separate distinct events, and with little real regard of the longer term contexts that they would arise in, hold value in, and with time become routine and then obsolete within. At the end of Part 12 I stated that I would continue that posting’s narrative here, by discussing:

• “Contextual pace of change issues, and innovation shelf lives as sources of consideration that would impact upon strategy and its decision making processes here. And I will also discuss all of this in the dynamic and at times less than clear-cut context of global flattening as it is taking place in this 21st century, as accompanied by the reactive (if nothing else) global wrinkling and push back that accompanies that. I will at least briefly consider how those types of factors would impact upon business process improvement and innovation, and its retention or transfer that I have been addressing here too.”

I begin addressing that complex of issues from the perspective of the above-offered preamble paragraph that I immediately preceded this bullet point topics list with, and with the innovation life cycle. I do so because as I stated in recent installments to this, timing can be everything in both setting and executing strategy and planning where innovation is concerned.

Let’s begin with the fundamentals and with the initial development of a new innovation or change. And at least initially, let’s set aside the issues of evolutionary versus revolutionary change and simply consider the basic life cycle steps that any new development in what is offered faces, and whether that means offered strictly in-house and on a more trade secret basis or to an outside market. A new, in this context business process resource or new improvement on an existing one, arises and is locally prototype tested in one area of a business or otherwise vetted. And it is updated and refined based on this real world, end user facing beta testing process. Then it is rolled out in-house, and a more formal process begins if appropriate that would determine whether this would be retained in-house or offered in some manner to other businesses. I presume here that this is not a business that develops such resources to sell or license as its basic business model. And independently of that, a more product evolution processes of refinement and improvement is probably going to start too, and certainly if the initial innovative change in question is more than just a simple cosmetic one – in which case this will have already been taking place.

Now let’s set aside one of the key starting assumptions of the above paragraph and start parsing out some of the additional factors that enter into that with an at least relatively simple cosmetic change versus a disruptively novel and even game changing innovation, as this distinction would likely impact on value longevity and innovation cycles:

A. Cosmetic changes, as a simplest case in point example, can hold as ephemeral a defining value as an impulse-buy oriented fad, and can disappear into the business productivity counterpart of a discount isle at mark down prices, and seemingly overnight as a next cosmetic update arrives, and a next after that. This means that cosmetic changes, as an extreme case can and do hold only short term value, and very little marketable value even then. And if this applies to consumer markets and store settings, it does so just as strongly for minor and cosmetic changes that might be brought to business productivity tool user interfaces, as a business process-supportive example, and particularly when its users see this change as only offering cosmetic value without making those tools easier to use or more productively effective when doing so. (Note: most software changes, office productivity software included, are minor and more cosmetic in nature than they are fundamental in nature, and certainly if you set aside behind-the-scenes security patch updates from consideration here and only consider user-visible changes.)
B. A genuine disruptively novel innovation that leads to, for example, a new type of business productivity tool that would hold real value for those who use it, on the other hand, is going to hold both larger and longer lasting value. And that will hold true both for those who use it and for those who own it and license or sell it. And focusing on the later of those two stakeholder categories for the moment, that holds for those who would retain this innovation in-house in the developing company and for exclusive use there. And it would hold true for any outside customer/users who would come to depend on this new capability too. And this defining source of value will in all likelihood continue to emerge and unfold for its end users, and for its developer/owners and according to both of those scenarios as it is evolved and improved upon, and until it has become effectively mainstreamed into general use with look-alike alternatives out there on the market, produced by other competing businesses, taking away any initial first mover effect benefit that the initial developer might have started out with, or until it is supplanted by a fundamentally new next-step alternative, or both.

I offer these two examples as representing what amounts to extreme end-case alternatives that would fit upon an innovation novelty and longevity spectrum, with most innovative change fitting somewhere between them.

• Businesses in general would see little if any incentive to retain a more Type A innovation in-house (to use the above-cited labeling) and certainly if this was a possible source of at least short-term revenue generating value if marketed and sold. And return value there could mean either a bump in brand name recognition, or a probably short-term cash profitability or both.
• But those same businesses would see both possible risk and possible value from either of the scenarios of retaining in-house or offering more publically, for anything more like a Type B innovation, to further cite the above designating labels. And the more B-like an innovation is, when considered for how it fits on the innovation novelty and longevity spectrum, the more important it becomes to carry out effective cost benefits analyses that would help evaluate what type of usage and deployment strategy would work best for the developing business.

My primary goal for the next installment to this series will be to at least begin to more fully explore the options and possibilities of the second of these two bullet points with its Type B innovation focus. And I will at least begin to do so by posing a set of organizing due diligence questions that a business owner or executive facing this type of decision would want to be able to address:

• How much value would this innovation actually create, for its implementation and use?
• And how much value would it create, net the costs of developing and implementing it?
• And how would this innovation best be evaluated and value determined for its likely competitive value created, from how it would reshape and at least hopefully improve business efficiency for the enterprises that bring it into their systems and use it?

Then after addressing this set of issues, I will proceed with my to-address list of topic points as repeated for orienting purposes towards the top of this posting.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 and Page 3 continuations.

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