Global positioning system maker Garmin Ltd. announced in early November that it would exit the production of smartphone handsets. "We thoroughly analyzed the rapidly changing dynamics of the smartphone market and concluded that we cannot reach the scale necessary to effectively compete in the industry," said CEO Min Kao in the company's third-quarter earnings release. "While this was clearly not the desired outcome, we must be prudent with our ongoing investment in the category and have therefore redeployed research and development resources internally, winding down our investment in mobile handset device development."  

George Coulston: "It's easy to have good ideas; there's no shortage of them out there. It's much more difficult to define an opportunity, build a business case around that opportunity, really vet out customer requirements and then work your way through all the commercialization issues."

Garmin's decision to shut down development of a product not meeting expectations is a scenario likely experienced at one time or another by most manufacturers that are engaged in innovation. Successfully introducing new products into the marketplace is a notoriously challenging endeavor for most manufacturers even as they promote the importance of innovation to their companies' growth. And simply having a good idea is not enough. "It is easy to have ideas; there's no shortage of them out there," says George Coulston, vice president, global research, development and engineering for tooling producer Kennametal. "It's much more difficult to define an opportunity, build a business case around that opportunity, really vet out customer requirements and then work your way through all the commercialization issues."

Indeed, opportunities to misplay innovation extend well beyond the ideation phase, but so, too, do opportunities for improvement. The challenge, then, is to translate those opportunities to misplay innovation into opportunities to improve the business side of innovation. The following examples and observations may help manufacturers whose own new-product introduction efforts have faltered.

Don't Short-Shrift Market Research

How often has a seemingly good idea been introduced, only to languish for lack of a customer, too many competitors or being late to the party? One reason such failures occur is lack of insight into customer economics and competitors' capabilities, says Mark McClusky, president of consulting firm Newry Corp. It's insight that should be gathered before a manufacturer starts spending millions of dollars to ramp up production.

Kennametal's Beyond Blast insert platform made its debut at IMTS 2010 in Chicago in September. Product development is one of the six key processes by which the manufacturer operates its business.

"People put products into the marketplace thinking they really know what's going on but they really don't. And the reason they don't is because they either didn't invest enough to try and find out or because they were unable to find out," he says.

McClusky, whose clientele is 80% industrial, says the error he sees most frequently is companies underestimating their competition. The company will enter the marketplace with what it believes is a sure winner, "only to find out the competition already has something similar, could get to something similar if they worked at it a little bit, or the competition has the ability to reduce price, for example, and respond to a product introduction without a lot of trouble." By the same token, he has observed manufacturers invest tens of millions of dollars on products without truly understanding whether a market existed for it or not.

Certainly, understanding customer needs presents challenges as well. Even with processes designed to do exactly that, such as Voice of the Customer, manufacturers should take care that the customer's voice is not substituted with the voice of marketing, the voice of the sales force or the voice of some technical guru. It can and does happen, says Coulston, whose company was named 2010 Outstanding Corporate Innovator of the Year by the Product Development and Management Association. He explains: "The problem with that is you're not really capturing the voice of the customer. It's important in these VOC processes to take cross-functional teams that are going to be involved with product development and have that team directly spend time in the field with the customer, preferably in the environment where their targeted product is going to be used."

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