Kellogg World Alumni Magazine, Winter 2001Kellogg School of Management
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New! Improved!
Creating and marketing new products demands the kinds of insights that Kellogg delivers

By Mary E. Morrison

If only reality were like the cartoons, where eureka moments occur accompanied by a light bulb flashing above the head of an inventor.

In the real world, discovering and then developing a bright idea is not quite that easy, especially for companies looking to market new products in a tightening economy. As many product innovators might attest, a good, truly unique idea can be hard to come by. Even tougher is the reality that a good idea doesn't ensure a successful product; how the product is designed and marketed to the target audience often proves the bigger challenge.

The role of innovation in the corporate world is simple: a company's product is its raison d'etre. Every sales pitch, advertising campaign, catalog, Web site, call center -- and bottom line -- is at some level about the product or service.

"Product innovation is the engine that drives growth, and no company can survive in the long run without a robust new product innovation program," says Mohanbir Sawhney, the Kellogg School's McCormick Tribune Professor of Electronic Commerce and Technology.

The MMM Entrepreneurship Program enables students to turn an idea into a new product. Here, the founders of offer improved software for Internet telephony.  

New products can generate revenue but more important, they establish a company as an innovator. "New products are the lifeblood of a company," explains James Conley, associate professor of technology and e-commerce who has taught in the Master of Management and Manufacturing curriculum (MMM), a joint program between Kellogg and the McCormick School of Engineering. "This is what in the mind of your customer distinguishes you from a run-of-the-mill competitor. If you're always bringing new things to the market, your company becomes known as a leader, and that has value in the mind of the consumer."

"Organizations must be able to fuse business strategy with new product design and development to remain competitive in the marketplace," says Kellogg Dean Dipak Jain, a marketing and new products expert. He notes the importance of first creating an innovative mindset and then developing these insights to bring a new product successfully to market. Equally important, he says, is conducting a strategic audit of your previous performance to assess the path your innovation should take.

New-product successes establish companies as cutting-edge pioneers. Kyocera Wireless Corp., a phone manufacturer, has extended the capabilities of wireless technology with its Smartphone, a cell phone and personal digital assistant in one device. "I've thrown away my PalmPilot and my cell phone," says Sawhney, who has a Smartphone and says it is one of his favorite new product innovations.

Where it all begins
New product ideas can come from any number of places, including research and development labs, marketing research, lead users or consumers.

There are ideas that start in research and development labs -- what Robert Kozinets, assistant professor of marketing, calls "solutions that are looking for problems." So, for example, a lab creates a technology because it can -- not necessarily because consumers demanded the advance. Then, there are more marketing-driven product ideas that come from market research; a new flavor or a lower-fat version of a food product, for instance. "Consumers really don't tend to come up with the big breakthroughs themselves; they tend to come up with the incremental improvement," explains Kozinets, who teaches the marketing department's Introduction to New Products and Services.

Another source of new product innovations are "lead users," Kozinets says. A lead user, an inventor of sorts, customizes existing products to create a new product that fills a need. So when people in the computer animation business needed faster software, industry innovators were able to render pictures faster for animated movies after tinkering with computer chips. Such an innovation has a ripple effect: computer chip makers then approached these lead users and asked if they could use the technology in their chips.

Ideas can also come from salespeople in the field, Kozinets notes, as well as retailers or customer complaints. "There are almost as many different places to find new products as there are new products themselves," he says.

Kozinets says one of the biggest challenges facing his students, who must develop a new product over the course of his class, is to come up with original ideas. "Every kind of idea that you can think of, you tend to look at it and someone's doing something similar. So there's a real frustration that every area in the corner of every market is taken."

Kozinets suggests students read material they wouldn't normally come across, such as science fiction or scientific journals. He also asks students to consider what people are reading, what their diets are like, what their concerns are -- and how it might be possible to structure a good or service around that.

Turning to the experts
It's an approach that's also followed by IDEO, a product design firm based in Palo Alto, Calif., that created such products as the Palm V. IDEO project teams have anywhere from two to eight people, and include members such as industrial designers, interaction designers, mechanical engineers or materials experts.

Tom Stat, director of business development for IDEO, says the company looks at real people and their needs.

"There's a saying around here that people don't want products," he explains. "People want to do what people want to do. It's not about fighting with the cell phone, laptop or VCR. It's about talking with friends and family, accessing or processing information. Struggling with the product is not supposed to be part of the activity. The perfect product is invisible."

Companies looking to develop new products also turn to innovation experts, such as Gerald "Solutionman" Haman, the founder of SolutionPeople in Chicago. Kozinets brings such experts into his classroom. Haman has helped companies such as Dow, Kraft, Adidas and General Mills brainstorm by placing them in "Thinkubators," or thought-provoking meeting places.

"If people want to 'think outside of the box,' they should not be put in a box," contends Haman, who makes appearances in his 'Solutionman' costume -- like Superman with a light bulb head. Many teams experience "cubicle creativity," Haman says, whereby the size of their ideas is influenced by the amount of space in which they have to think.

To overcome such creative blocks, SolutionPeople works with companies using a four-step process of investigating needs, creating ideas, evaluating solutions and activating plans. In addition to dozens of other activities intended to foster creativity, the company takes groups to see the Blue Man Group and follows up with brainstorming sessions.

The MMM edge

Kellogg's MMM program also proves a great source for the sort of creativity that leads to product innovation. "Creativity and entrepreneurial drive are essential for successful managers," says Distinguished Professor Sunil Chopra, who serves as co-director of MMM with colleague Professor Wally Hopp. Both faculty members point to a recent survey conducted by the school revealing that, since the start of the program a decade ago, nearly 20 percent of MMM graduates have gone on to own or found a company.

"Our core course on product development deals with the process of bringing new products to market," explains Hopp. "We give students experience in a number of key areas centered around turning a new product into a real business."

Hopp also points out the strengths of the MMM Entrepreneurship Program, which sponsors teams of students who actually pursue the launch of new businesses. A number of these students have actually started companies while still enrolled at Kellogg. To fulfill the program's Integration Project requirement, students work closely with faculty to turn a technological innovation into a business venture.

Whatever—and whomever—the creative process of product innovation involves, companies must ensure that they have many channels from which to import ideas, Sawhney says. "You have to look in many places, because you get different kinds of ideas from different sources. It's important to have a cross-functional team involved so you have many voices. That adds to the richness of the ideas."

©2001 Kellogg School of Management, Northwestern University