Martin Mocker

Jeanne W. Ross

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">In Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>Companies create problems for customers and employees when product innovation goes unmanaged. Eventually, excessive operational complexity hurts the bottom line.</p>
  <h5>Three Solutions</h5>
  <p>Focus on product integration, not product proliferation. Make sure your product developers work closely with customer-facing and operational employees. And settle on a high-level purpose that can guide decision making.</p>
 </div>
</article-ideainbrief><p>Royal Philips, the Netherlands’ most valuable brand, has long been a leader in product innovation. But in the first 10 years of the new millennium, the company’s revenue plunged 40%, profits for the decade were wiped out, and its market capitalization fell significantly. What went wrong?</p>

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<p>Innovation is often seen as the engine of growth, but there is a dark side: Unmanaged innovation frequently leads to excessive business complexity &#8212; in supply chain, sales and marketing, product development, IT, and administrative processes &#8212; leading to higher expenses and difficulties for customers and employees. Every time customers are asked to enter the same data twice, have inconsistent experiences when interacting with different parts of the business, or are forced to contact multiple people to get something done, it hurts the company. Every time employees can&#8217;t access important information or their decisions get derailed by silos, it hurts the company. Excess innovation can even destroy a business.</p>
<p>The authors offer three guidelines to address this problem: focus on product integration rather than proliferation; make sure that product developers are in close touch with customer-facing employees; and define your purpose in a way that will guide decision-making.</p>

The Problem with Product Proliferation

Innovation is often seen as the engine of growth, but there is a dark side: Unmanaged innovation frequently leads to excessive business complexity — in supply chain, sales and marketing, product development, IT, and administrative processes — leading to higher expenses and difficulties for customers and employees. Every time customers are asked to enter the same data twice, have inconsistent experiences when interacting with different parts of the business, or are forced to contact multiple people to get something done, it hurts the company. Every time employees can’t access important information or their decisions get derailed by silos, it hurts the company. Excess innovation can even destroy a business. The authors offer three guidelines to address this problem: focus on product integration rather than proliferation; make sure that product developers are in close touch with customer-facing employees; and define your purpose in a way that will guide decision-making.

The Problem with Product Proliferation

Summary.

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