Popular opinion suggests that great innovation results from a mysterious combination of forces that make it appear to “fall from the sky.” Call it an act of divine intervention, the harnessing of creative genius, or just dumb luck –innovation seems to most of us to surface at random moments and emerge from circumstances that cannot be reproduced or understood.
Analyzing Evolutionary Patterns White Paper
However, based on a 30-year analysis of 300 product categories covering 225 countries it becomes clear this perception is false. There is a need to radically alter our perception of innovation towards a very different, perhaps provocative view: Tomorrow’s winning innovation can actually be predicted.
Categories follow common patterns of evolution, and successful innovation occurs in waves that can be predicted.
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FACT: Innovation Can Be Predictable...Here's How
Popular opinion suggests that great innovation results from a mysterious combination of forces that make it appear to “fall from the sky.” Call it an act of divine intervention, the harnessing of creative genius, or just dumb luck –innovation seems to most of us to surface at random moments and emerge from circumstances that cannot be reproduced or understood.
However, based on a 30-year analysis of 300 product categories covering 225 countries it becomes clear this perception is false. There is a need to radically alter our perception of innovation towards a very different, perhaps provocative view: Tomorrow’s winning innovation can actually be predicted.
Categories follow common patterns of evolution, and successful innovation occurs in waves that can be predicted.
Where it All Began
Nearly three decades ago, one of the great gurus of innovation, Robert McMath began collecting new products to critique. With thousands of items readily available in his collection consumer products giants often made pilgrimages to view Bob’s warehouse and learn from the master.
Bob understood there were many factors that could drive product success or failure, including something he termed the “chord of familiarity”. Great innovation builds on what comes before it, and does not require people to make radical changes in beliefs or behavior. In fact, what often looks like breakthrough innovation is actually a small advance or new twist on another well established idea. That the change is evolutionary, however, doesn’t keep its impact from being revolutionary.In the course of tracking every launch, globally across the consumer products universe and monitoring market evolution over time, two patterns consistent across categories and market spaces appear:
- Consumer needs evolve in predictable ways. There are waves of successful mass market innovation that mirror a natural evolution in consumer needs.
- Innovation “news” that addresses those needs gets adopted in predictable ways. In most cases, truly breakthrough, “never-been-seen-before” innovation tends to fail (at least in the mass market). Consumers are more likely to embrace a new innovation if it builds from previous, similar ideas that make the new advance feel less radical. “News” in the form of new product features or benefits first get launched by smaller market players, often in limited market distribution. Other competitors mimic or add “twists” to these launches, and one can usually see a “tipping point” where a new idea starts to show up with enough frequency that it then has the potential for mass adoption. Importantly, this diffusion of innovation occurs in a cross-pollinating manner, across geographies and market spaces. So, a new idea that shows up in one product category is very likely to have relevance in another category that has similar dynamics.
For instance, Crest Whitestrips in many ways appeared to come out of the blue about 10 years ago. But if you were to trace back five or 10 years prior to their launch, you would notice numerous previous launches that used a similar approach or a similar delivery system or delivered similar benefits – these all paved the way for this successful launch. Examples include estrogen patches, nicotine patches and breath strips
When Whitestrips actually came to the mass market, its success came from borrowing “news” that was already in the market and combined it in an inventive way at just the right time. It addressed a natural evolution of the needs that people were having in the oral care world.
Predicting Tomorrow’s Winning Innovation
The key to successful innovation is hitting the market with the right “news” at just the right time, in a way that ties into the natural evolution of consumer needs.
By focusing on understanding the natural patterns in innovation and using that to predict where tomorrow’s big opportunities lie, four key drivers of winning innovation emerge:
- Business Dynamics–Bringing rigorous business understanding to the innovation solution. There are some things in a good process that support this—like senior management stakeholder interviews and use of a broader set of cross functional interviews than you might do on a typical market research assignment.
- Consumer Dynamics and Insights–It’s crucial to get a “market structure” view of how the consumer sees product segments and usage occasions or jobs and need states, and develop an integrated model around that. There is also a need to deeply understand the consumer experience -- typically an ethnographic approach, in-home interviews, etc.
- Creativity and Design – Many innovation specialists tend to focus on both consumer insights and creativity. They might have a great ethnography process that identifies a consumer need and a creative design team that brings it to life through an interesting product idea. However, this alone is not enough.
- Understanding Innovation Patterns More on this in a minute).
Utilizing one, two or three of these drivers, however, is simply not enough. All four must be combined to generate successful innovation. Indeed, the fourth is perhaps most key to include in the mix as it is difficult at best to project into the future or to get consumers to tell you what they’re going to want to buy in five years when you’re ready to launch right now. It’s an understanding of Innovation Patterns, something concrete that can be used to project the reality of today’s world into the future. If we understand the patterns that exist, it can give us a view towards what’s going to happen tomorrow and an ability to make the innovation effort a lot more predictable and successful.
The Art and Science of Innovation Patterns
An important step in leveraging Innovation Patterns is getting to the undercurrents that drive the waves of successful mass market introduction. These waves are unique to each category and to really understand them, you have to go back to the early stages – 20, 30, or even 40 years ago and look at the core drivers. In this first wave there are usually two or three category-specific expressions of four cornerstone drivers – safety, convenience, gratification and health or well being. These are the two or three reasons they came to the category in the first place.
The second wave of innovation is products that deliver new and more advanced expressions of those four cornerstone drivers. The third wave is a fusion of those drivers – at some point consumers don’t want one or the other, they want it all. The fourth wave is where the secondary needs start to come in. Sometimes companies jump to those secondary needs before the category is at that stage of evolution and they tend to fail in the mass market. The fifth wave is around addressing new targets in new occasions.
It’s easier to see how and why customer needs evolve than to know what to do and when to do it. The final piece of the innovation puzzle is leveraging the innovation adoption patterns. This requires monitoring, tracking and recording consumer shifts on a continuing basis with a careful eye in order to take action – finding an ownable future white space, and developing corresponding high-value strategic platforms.
Moving Beyond Seeing the Future to Owning the Future
Even if companies are working the first three drivers of innovation, digging into innovation patterns is key to defining future market opportunity and making innovation more predictable. However, it takes more than knowing “where to play.” A concerted creative and design effort is still needed to translate innovation into action. By understanding evolving consumer needs and what type of innovation should be generated to meet those needs, companies will be able to channel their creative genius into successful innovation.
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