An analysis of innovation investments and returns conducted by The Monitor Group and published in the Harvard Business Review suggests a better-balanced innovation portfolio results in meaningfully higher share price performance.
Specifically, it suggests that if 10% of your innovation activity is “transformational,” which is roughly synonymous with “breakthrough,” you can expect to generate 70% of your innovation returns from those transformational innovations.
However, developing breakthrough innovations is difficult. Many breakthroughs die in the innovation process. Looking at our databases, we see that only 1% - 2% of CPG innovations in our Concept/Product Test database are breakthrough compared to 5% in our Concept database – suggesting that many breakthroughs die before proceeding to the CPT phase.
There are many obstacles to getting to breakthrough innovations. These include procedural barriers in your organisation that stop you from introducing more revolutionary products, not having the technical feasibility to manufacture the product, and financial controls that prevent innovations that don’t meet hurdles from moving forward (despite the need for iterative research and design required when developing breakthrough innovations). There is another set of barriers related to innovation success that we refer to as consumer barriers. This paper will shed light on these real-life consumer barriers – and what you can do to prevent them from killing your breakthrough innovation.
Consumer barriers to innovation
- Not relevant
- Not believable
- Too expensive
- Requires behaviour change
- Forces "Future Sate" thinking
Researching the breakthrough innovation
There are several questions from a marketing research standpoint that a marketer needs to ask in order to successfully launch a breakthrough innovation.
- Are your ideas breakthrough?
- Do you know the competitive context?
- Are you using the right stimulus for a breakthrough?
- Are you going beyond the basic measures?
- Foundational measures that predict in-market success - Relevance, Expensiveness and Differentiation - along with Believability
- Adjunct measures
- How far ahead of the curve are you?
- How do you measure influence?
- How do you market a breakthrough innovation?
The bottom line on breakthroughs
To effectively introduce a breakthrough innovation, marketers must recognise that the research and marketing behind the innovation are different from a traditional product. Before moving forward, marketers must first confirm with consumers that they really have a breakthrough product. Second, they need to understand the potentially wide competitive set. Third, they need to modify their research approaches to ensure that they use the right stimulus and ask the right questions. Finally, they have to rethink how they forecast the success of these products (taking into account the newness of the innovation along with the role played by influencers) and build their marketing plans accordingly.