Business Case Studies, Executive Interviews, Sam Kogan on Innovation

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Executive Interviews: Interview with Sam Kogan on Innovation
November 2006 - By Dr. Nagendra V Chowdary

Dr. Sam Kogan
President & Chief Operating Officer of GEN3 Partners

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  • Is it true that it is easier to innovate in a product related company than in a service related company? Or is it a misconception?
    Its definitely a perception that it is easier to innovate in a product company than in a service company. Overall, I believe that is a misconception.

    To illustrate, lets take a look at companies like Southwest Airlines and Starbucks. Both companies are pretty innovative and they are both in the services industry.You can be successful in service innovation the same way you are successful with product innovation if you start in both cases by first

    defining innovation. At GEN3 Partners we define innovation as a significant movement along the main parameters of customer value.So, whether you are providing products or services, you need to define your customers value, understand what they are going to buy from you as well as what features of the product or service they are willing to pay for. In the end, it doesnt really matter if it is a service or product company. If they have focus, if they have discipline, and if they have support from internal leadership they will see the results.

    One of the reasons people have this misconception of how companies innovate products and services is because we tend to think that product companies are the ones with the big R&Ds departments, filled with smart people dedicated to coming up with innovative new concepts and that service companies simply dont have it. Instead, we think service companies only study consumers and come up with simple solutions, which is simply not the case when we think of Starbucks or Southwest Airlines.

    Companies today tend to treat innovation as owned by R&D. As long as we believe that innovation belongs to a function or a single department, this misconception will damage how well companies innovate.

    You can be innovative in a product and service company as long as you define the main parameters, and then the process tools and discipline to really improve along these parameters. In addition, companies should forget about finding the place for innovation. Instead it should spread across the organization. If companies, whether they are service or product oriented, follow these recommendations, they will see results faster.

  • What is the best way to integrate the product life cycle strategies and innovation strategies?
    Companies with Product Life cycle Management (or PLM) have concerns about the help from the right product innovation. An innovation discipline, such as GEN3 Partners delivers, can help them choose the right strategy for product improvement development in relation to where on a product life cycle a given product exists.

    The best way to integrate is to understand what each discipline, product life management and product innovation could bring to each other. For example, part of GEN3 Partners' innovation discipline is the ability to predict future innovation of products plus an understanding of what needs to be done depending on where the product is on a life stage.

    In fact, there is not only a possibility to integrate PLM and innovation strategy but a need to do so. This is because each of them is involved in something new and powerful related to the other. I believe it is possible to integrate product life cycle strategy and innovation strategy because both approaches have a common currency value over product. What I mean by common currency is how to unite things together so you bring them to the same language. Companies develop products and put them through different stages of life cycle because they want to try to improve their value. The value of the product is made out of what the product can do, functionality or what it will cost us to have it.

    Product life cycle management defines direction for product development and a direction in which a value of a product will increase. Innovation strategy will help you to choose the right way to increase this value. So, while product life management will help to define the direction, innovation strategy will help ensure you meet your goal.

    One more thing to remember is that very often people start thinking about innovation, from the product life management area, when it is time to save the product. They look at it at the very end or when product is already matured. Companies shouldnot wait for this, but instead join these two approaches from the very beginning. If you use innovation management to minimize the product development problems, then product life cycle strategy will be more successful.

  • Does benchmarking lead to innovation or does it stifle innovation? After all, some view benchmarking as simply sophisticated copying and therefore the incentive to innovate is abysmally low.
    Benchmarking goes to the same issue of perception that innovation is something that comes from flashes of inspiration, or that we need to take a shower to have the light bulb above our head to come on. It plays into the notion that when you deal with innovation you shouldnot deal with something as boring as benchmarking

    But innovation is not a random burst of inspiration. It should come from discipline. And if you look at any discipline, it starts at understanding the competitive landscape. Considering this, benchmarking is an important and critical part of innovation discipline.

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