A Critical Evaluation of Outcome-Driven Innovation
Nicki Sutton
Sep 8, 2009
By Strategyn UK's Nicki Sutton
The broad aim of this thesis is to critically evaluate Outcome-Driven Innovation and to draw conclusions on its credentials as a leading innovation strategy in contemporary marketing practice. More specifically, this thesis aims to answer the following research question: Is Outcome-Driven Innovation an effective tool for new product development?
The author describes Outcome-Driven Innovation as a new approach to listening to and incorporating the voice-of-the-customer throughout the innovation and new product development process. In evaluating ODI, the following tools are used: primary research in the form of semi-structured interviews and case-study discussions, and secondary research in the form of an extensive and focused literature review.
In the introduction, Sutton walks the reader through the more recent evolution of innovation theory, starting with Robert Cooper's quote: "Innovate or die." She says that businesses are being forced to find ways of optimising their technological, marketing and organisational capabilities to innovate through the identification, creation, and delivery of value in their product and service offerings.
She cites studies that show that new product development comes at a cost and is not without risk. One study estimates that in 2002 companies in the U.S. alone spent a total of $253 billion on research and development. Further, she cites other studies that show that 60 percent of all new product developments are killed off before they reach market. Of the 40 percent that get launched, 40 percent fail to become profitable.
The innovation and new product development stakes are clearly high and it would seem logical that innovation should not be left to chance, she notes. To mitigate the high commercial risks and reap the large financial rewards, innovation should be a consciously controlled, efficient and methodical business process, not a random, wasteful one.
Sutton writes that a contemporary framework of innovation is developing that shifts the focus of value creation away from a “value-added,” or company perspective to a “value-in-use,” or customer perspective.
Outcome-Driven Innovation is shown to be consistent with these new paradigms, she says. However, the author argues that the place of Outcome-Driven Innovation in contemporary strategic marketing practice will be established by its provision of a rigorous methodology for acquiring and utilising customer input in innovation and new product development.
This objective ODI assessment is rich with examples, history, and research.
