Innovation Must Touch Both Product and Process

That is what AT Kearney experts have to say on the issue. Often business executives believe they can make it by concentrating on product innovations, which are important, but not enough.

Are companies in your area innovating at the level of both product and process?

Here is a summary of AT Kearny has to say:

"From the retro look of Chrysler’s PT Cruiser to the “disappearing” seats in Honda’s Odyssey minivan, product innovations draw the crowds. Splashy new designs and accessories confer competitive advantage and help companies gain marketshare in the short term.

But to sustain that lead, companies must also strive for innovation in their underlying business processes. For example, Toyota has achieved its preeminent position by pushing the operations envelope à la Kanban in its just-in-time production tool and systematically embedding such process innovations throughout the organization. Companies that innovate both product and process consistently emerge at the top in terms of profitability, according to A.T. Kearney research.

Typically, companies map and analyze existing ways of doing business and make incremental improvements. Process innovation goes much further. It establishes radically new procedures and policies to substantially improve effectiveness, quality, flexibility or productivity. Companies with innovative processes build and sustain competitive advantage because they can rapidly and accurately respond to ever-changing market conditions."

More here.