Innovating in an Era of Uncertainty and Complexity

Editor's note: The article below encapsulates a sponsored research project titled, Innovation for a New Era, conducted by Patrick Deren, Matthew Grant, and myself, that was completed prior to the Covid-19 pandemic.


If you are in charge of creating new products for your company, you already know that a confluence of forces was challenging long-held assumptions about the way products are developed long before the Covid-19 crisis began.

Advances in digitalization, artificial intelligence, and the Internet of Things (IoT) were already connecting products to people in ways never before possible. Apps, sensors, and social platforms are integrating products and casting off terabytes of data in the process. Add the movement toward virtual and contract manufacturing and globalized, interwoven supply chains--with both the benefits and risks they involve--and you begin to realize the breadth of changes already taking place. Mix in a global pandemic, plummeting demand, evolving customer requirements, burgeoning regulatory and compliance requirements, and the unpredictable consequences of political, environmental, or health crises, and the result is greater uncertainty and complexity than ever before.

To be sure, these combined forces of change will make the process of product development increasingly challenging. At the same time, however, they create the conditions for growth and opportunity. For those who understand how to navigate this shifting terrain, the future holds a great deal of promise.

Our report explores that terrain.

It is based on a series of wide-ranging interviews with senior leadership at six organizations on the cutting edge in healthcare, consumer electronics, and autonomous vehicle technologies. Each organization was selected for its bellwether qualities.

Some of these firms are in the startup stage. Others are long-established. What they have in common is that they are not just navigating this new terrain, they are mapping it and shaping it to their advantage. This report reveals common themes in these companies' approaches. And while further research is surely warranted, we believe that these commonalities in approach clearly indicate how new products will be developed into the next decade.

Our interviews and research revealed four key principles that are guiding companies on the cutting edge of innovation:

1. Breakthrough innovation often results when the goal is solving a complex problem in urgent need of a solution.

To truly stand out, a new product needs to address a customer pain point, either articulated or unarticulated, particularly where existing solutions come up short. Sometimes solving such problems saves lives.

For one of the senior leaders of Lumicell, a medical device innovator, the goal was literally saving lives. Founding President and Chief Scientific Officer W. David Lee had lost his wife to cancer. She had an operation to treat her breast cancer, and Lee learned that they did not have imaging to guide the resection and find all of the cancer. Lee and his partners at Lumicell, based in Newton, Mass., went to work.

They created a handheld imaging system that allows surgeons to literally see any unremoved cancer cells during an operation. In this way, thanks to Lee's innovative vision, the outcomes of breast cancer surgery are being improved, and others are being spared the loss of a loved one.

2. The most innovative products today create a connected customer experience.

It's no secret that today's whiz-bang new product is tomorrow's ho-hum commodity. Product lifecycles are now measured in dog years as copycat manufacturers neutralize new features almost as fast as they appear.

One way to stay ahead is to turn the traditional "product" into a connected customer experience. Peloton redefined the experience of using an exercise bike, connecting in-home users to live classes, and streaming shared fitness experiences to their growing legion of fans. In an era that's seeing social distancing become a new norm, Peloton's ability to create a virtual community is particularly relevant.

Or take Spinn, headquartered in San Francisco, which has created a similar networked experience for coffee lovers. In 2014, Spinn captured media attention with an entirely new approach to making coffee based on a patented centrifugal brewing system. The company's sleek machines are voice-enabled. Users can "speak" to the coffee maker and interact with it remotely via an app.

But these innovations were only the beginning. Spinn gained traction when it began thinking beyond the product--seeking ways to connect to the experience of great coffee and becoming an ongoing part of their customers' lives. As one example of creating networked experiences, Spinn's idea factory developed a community of boutique coffee roasters in various parts of the world from which users can reorder their java at the touch of a button. Orders arrive with a QR code telling the machine specifically how those beans should be brewed.

3. Innovative products reduce complexity for the customer.

One big takeaway from all our interviews was that creating a simple, elegant solution requires harnessing increasing levels of complexity for the manufacturer. Yet simplicity is often the subtle key to innovation success, something customers crave in a world that is becoming ever more complex.

Kymeta, based in Redmond, Wash., makes flat-panel satellite-tracking antennas. Before Kymeta's breakthrough, installing satellite antennas was expensive, cumbersome, and time-consuming. An engineer had to be on-site to properly align the equipment with the satellites sending signals. And satellite antenna needed to remain stationary to receive signals.

Kymeta set out to simplify the process.

"We wanted an easier way for buyers to use the service," said Neville Meijers, Kymeta's Chief Product and Marketing Officer. " We developed an end-to-end service that allows customers who aren't familiar with satellites to become connected." These days, first responders and the military use Kymeta's antennas to create broadband connectivity in remote locations. They can be attached to vehicles of all sorts - cars, planes, ships - and used while the vehicle is in motion - a revolutionary improvement.

4. Innovation depends on collaboration and cooperation between the organization, the supply chain, and the customer base.

As we were winding up our interview with Nate Ramanathan, Vice President of Operations for autonomous vehicle pioneer AEye, Nate made clear why we had had so much trouble scheduling an interview with him. Last year alone, he flew over 289,000 miles!

Ramanathan, we discovered, is much more than the traditional operations executive. He's chief orchestrator and evangelist of a vast network of engineers, suppliers, partners, and customers all collaborating to bring highly complex products to market. Except the market doesn't yet exist and the future is still being defined.

AEye is one of 80 companies in the Light Detection and Ranging (LiDAR) market, the du jour autonomous guidance system that detects objects and maps their distances. AEye's breakthrough product is called iDAR.

Impressive as the technology is, AEye's other breakthrough is one its customers rarely get to see: the company's innovative system of global orchestration that spreads AEye's cultural values and sense of mission across platforms, across P&Ls, and across continents. As the leader of this complex set of actions, Ramanathan says it's essential to build and reinforce trust. Trust is established with good communication, supported by a connective software platform. With that in place, AEye can integrate and anticipate ever-changing customer requirements.

As impressive as the technology is, AEye's other breakthrough is one customers rarely get to see: the company's innovative system of global orchestration that spreads AEye's cultural values and sense of mission across platforms, across P&Ls, and across continents. As the leader of this complex set of actions, Ramanathan says it's essential to build and reinforce trust. Trust is established with good communication, supported by a connective software platform. With that in place, AEye can integrate and anticipate ever-changing customer requirements.

As the autonomous vehicle industry evolves, some players are already dropping out. Others like AEye are moving forward and inventing the future--not just in terms of deliverable products, but in how they collaborate with multiple partners and interact with customer ecosystems.

"We take customer feedback seriously," Ramanathan told us. "We are learning every day."


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