Innovation, Strategy and Organizational Structure

Last week I posted about the essential marketing skill sets that employers are looking for.  The second most important skill set was innovation.  Yet, the CMO survey also showed that marketing was responsible for new products in only 51% of participating firms, and for innovation in only a third of participating firms.

Finding creative ideas, that is, ideas which are both novel and useful, is a challenge at the best of times. Innovation, by its very nature, fails more than it succeeds.

Here’s what I do know about innovation. First, if the purpose of innovation is to commercialize some product or service, then some group of people must represent the needs of the consumer or customer. The marketing function is most suited to this purpose, as they are closest to the customer. This is not to say that other functions shouldn’t be engaged in the process, but merely to say that understanding what is important to the consumer is a critical piece of knowledge in the innovation process. Many a firm has left innovation and new product development to the engineers. Often the result is a spectacular product in which consumers are completely disinterested.

Effective innovation strategies rely on structures that allow an organization to effectively exploit an idea.  Many organizations see marketing as purely a tactical function which provides all the advertising and PR, rather than a function that drives product strategy. 

To quote Regis McKenna, “marketing is everything”.  Whether or not the marketing department is driving innovation isn’t really important.  What is important is that the department responsible for innovation and new products has a marketing mind-set.  That is, they understand the consumer or customer deeply.  Most often, that consumer understanding resides in the marketing department.

How well do you understand your customer? Their decision-making process? What they care about? How they do things? If you don’t know the answer to this, you probably need someonelse leading your product development initiatives.


1 reply »

  1. having worked directly with the customer for years I understand how top management (and other product development folks) lose touch with what the customer actually wants and appreciates. It’s the responsibility of a good CMO to represent (and fight) for the consumer … and for the good of the company.

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