Could tools used by the digital industry provide answers for more traditional sectors? McKinsey published an interesting article in June 2018 about ‘how R&D organizations at incumbent companies could borrow the tools and techniques that digital companies use’. McKinsey argue that many R&D teams are hampered by aspects of their approach and could find solutions from other sectors.
In order to re-invent themselves the authors suggest that incumbent companies need innovation accelerators that they can use almost immediately, borrowed from what McKinsey call ‘digital natives’.
The article discusses four solutions that stand out:
- Digital twins – So-called ‘digital twins’ have developed sophisticated mechanisms for gathering data about items they have sold. These companies then analyze these data and use their findings to guide the development of new products, as well as software updates that correct flaws in existing products or add features to them.
- Virtual reality – Shorten the product-development cycle by using virtual reality (VR) hackathons. Visualization technologies like VR, augmented reality (AR), and 3-D printing can bring greater improvements in the rate and flexibility of R&D efforts.
- Pitch nights – A business could benefit from hosting what McKinsey call a ‘pitch night,’ in which it invites start-ups to consider an R&D challenge and derive solutions from their innovations. This, the authors claim, creates an infusion of fresh, entrepreneurial thinking.
- Innovation garage – To break down the silos that reduce rapid innovation, companies are setting up cross-functional R&D teams. One form of such a team is the ‘innovation garage’, a self-contained group responsible for quickly generating new ideas with minimal overhead.
Key elements of an Innovation Garage
- Frame: Key business stakeholders choose innovation areas that are relevant to consumers, technically feasible, and beneficial to the business.
- Collide: Consumer design, technology, and business experts co-develop product ideas, drawing on internal and external insights.
- Prioritize: Garage director and business stakeholders decide whether ideas should advance to prototyping phase.
- Prototype: Product owner and team strive to create a prototype within 15 weeks, pushing for a minimum viable product.
- Scale: If prototype phase confirms an idea’s feasibility and business value, the product owner and team will develop it for external launch
Finally, McKinsey then use the get-out clause “While all of these approaches have been shown to speed innovation at traditional companies, each naturally suits certain situations better than others”.
Summary
This is a well written article, the ideas/insights discussed could be very useful to standard B-to-C companies making classical products or first tier auto suppliers.
Still these companies are very different to ‘digital natives’ in terms of markets, technologies and cultures so the tools would need to be carefully modified by an R&D management expert with expertise across many industry sectors. It’s difficult to see how incumbent companies can use the tools discussed almost immediately.
In my opinion the approaches discussed are not radically new. For example, solution 4 looks very similar to the Stage Gate Process© and sophisticated visualization techniques have been used in Pharma to design molecules in 3D for many years; although these chemistry tools are different to VR as described here.
Additionally, some of the tools discussed would be more difficult to apply in Chemicals, Pharma, Coatings and Advanced Materials companies, where the approach to R&D has to be very different. For example, hosting a ‘pitch night’ would also be very difficult for a Chemicals company because of knowledge and IPR issues – the approach to marketing and technology development must be very different.
Post written by Steve Bone.
