I agree with HBR blogger Navi Radjou that the technically skewed innovation model is not appropriate for emerging markets. However, I would go a step further to say that this model is not and has not been appropriate for developed markets, either. As a product researcher, I have seen many products produced by these so called R&D teams fail because a market did not exist for the product or the product was not suited for the target customer. Do not get me wrong. I think that R&D teams can accomplish great things. I have seen R&D teams produce very clever and elegant solutions, but R&D teams should not work in a vacuum. The trendy work spaces of R&D teams is often missing an important ingredient: customers. As Radjou states, R&D teams should not only consist of engineers and scientists but also professionals who are well versed in the process of observing and understanding people and the contexts in which they live and work. These “people” professionals should begin their research before the scientists and engineers so that the design and technical work is framed by the needs of the customer, and not by the needs of scientists and engineers who are working in a vacuum.
For more information on Navi Radjou’s post “R&D 2.0: Fewer Engineers, More Anthropologists”, go here
Karen Berman and Joe Knight point out in their recent post to the HBR blog that “GM makes cars that people don’t want.” I think that is really the most compelling reason why GM failed, and it is certainly something they should have been able to prevent. As a product researcher and technology professional, I know how even the smallest, most agile, companies can become disconnected from customer needs. There are several reasons why this happens. The stronger the company culture is, the more insular and inward facing the company becomes. Employees are typically rewarded based on the degree to which they support the product direction advocated by management and and the degree to which they conform to the company culture. Employees learn that as long as they tow the company line they will continue to receive their bonuses and promotions regardless of how out of step the company is from the customer. The market impact of this approach usually occurs much later when the company can do little about it, such as the case with GM. As Peter Drucker pointed out many years ago, one way to create a more knowledge based and a less inward facing culture is to create an organization that is more horizontal in both form and in substance. I say substance because I know of many companies that have reorganized to create a structure that was more horizontal but continued to distribute power vertically. This typically does not create a less inward facing organization but instead creates waste, inefficiency and negatively impacts employee morale.