With most organisations looking to create new products, services or business models in the coming years as their primary strategy to generate organic growth, traditional companies are under intense pressure to develop innovative products to keep the pace of innovation and meet rising customer expectations.
Many R&D teams are now overhauling their approach to product innovation as part of their companies’ overall digital transformation. However, this takes time, and requires companies to modernise their IT architectures, adopt new technologies, reorganise their people and learn more agile ways of working.
Accelerating product innovation
To speed up product development, McKinsey has identified four tools and techniques that incumbent companies can borrow from digital natives in order to get ahead:
• Digital twins, which uses full life-cycle data to drive innovation in real time;
• Hacking in virtual reality, which shortens the concept-to-product time frame;
• Pitch night, which plugs in to an innovation ecosystem;
• The innovation garage, which puts innovators into the same room.
Nonetheless, adding value to customers doesn’t necessarily mean changing products radically. Product innovation also encompasses improved design and function of existing products, and using new technologies, manufacturing processes and materials to gain prominence on the market and promote business innovation.