The most important advantages of an innovation roadmap
With a roadmap you can assess the success of your new developments from the past more objectively. It also provides you with a concrete roadmap for your future research and development activities. In this article you can read about the most important advantages of an innovation roadmap for a more structured and goal-oriented approach to innovation within a company.
A new development is only an innovation if it brings a company more than it costs. This calculation sounds quite simple at first. However, this is only the case if costs and proceeds can be assigned exactly to that novelty and, above all, can be presented objectively.
Practice has shown that this is rarely the case because a new product always has an impact on the sales of the existing product range and on the cost structure of the company. Therefore, it is easy and common to calculate costs and success in the appropriate directions. To be more specific:
- If, for example, the company director himself acts as chief developer, then new developments are also presented as successful innovations which, on closer inspection, they actually are not at all. After all, the company director cannot be wrong.
- The economic evaluation of an innovation can be just as imprecise if the research and development department has developed a revolutionary new technology. This is considered successful within the company because it is technologically far ahead of the competition. Whether the potential customers can also draw an individual advantage for themselves from it and then also buy the novelty is not questioned first of all.
- Powerful sales managers can often turn out to be the source of ideas for those new developments that, overall, yield less for the company than expected. The pressure on the sales department to constantly offer customers something new can sometimes obscure an objective view of the business sense.
The view through the rose-tinted glasses holds two dangers
There are probably a hundred other reasons that lead to not entirely objective evaluations of innovations. However, they all have two important things in common:
- Beautified successes often remain undiscovered as such, as long as they do not turn out to be veritable flops. They then enter the company's annals as "milestones" and serve as a model for further new developments.
- The development of innovations that just go through as such ties up resources. However, these resources are then lacking for the invention of actually successful innovations.
Roadmap for innovation connects the past with the future
A roadmap for innovation can protect you from the fatal view through the rose-tinted glasses. This tool combines your innovation history with the trend universe relevant to your business that you have linked to the timeline.
To be able to present the innovation past objectively, you should work with two key figures:
- Innovation rate = share of innovation/total turnover * 100
With this figure you can relate the success of your innovation activities to your turnover.
- Innovation quota = number of innovations / number of all products * 100
This figure shows how important innovations are within the product range.
If you combine both key figures, you get an exact picture of your innovation activity, because the variables objectively illustrate the role new developments play in your company and how much their success has contributed to the overall result of your company.
Objective light on a company's innovation history
If you combine the two key figures with your profit and loss statement, there is no longer room for number trickeries in which costs and revenues are shifted around within the company. New developments that have markedly boosted your sales can turn out to be real cost drivers that do not deserve the title "innovation". Or you can discover novelties that generate only small profit contributions on their own, but apparently boost sales of other products from your product range and thus make a significant contribution to overall success.
During the analysis, you will also find out whether or not phases in which you have pursued many new projects have paid off in business later on.
You may see that if you launch a few innovations, but at the same time act very purposefully, you will be economically more successful. The two key figures and your income statement always show a holistic picture of your business. This provides you with an objective control instrument.
The objective view into your company's innovation history is therefore so important because you can derive patterns from it that you can continue to be successful in the future. This analysis ensures that you do not take any supposedly successful innovations as a model for further new developments and then fail.
Structure your own future of innovation
The Innovation Roadmap enables you to master future challenges in a structured way. Don't just think about the development of new products. An Innovation Roadmap also informs you if other types of innovation such as new services or business models are promising. With this instrument you can combine trends with your company's goals and derive your own strategies and even distil concrete actions.
Responding to trends with your own strategies
The successful car sharing provider Car2Go shows how this can work. This company is a joint product of the automobile manufacturer Daimler and the car rental company Europcar:
From Daimler's point of view, the typical goal for a car designer is to offer customers an ever better driving and uncomplicated mobility experience. The company focuses on the needs of its target groups.
The mobility requirements of all of us, including Daimler's target groups, have changed considerably in recent years. They have become increasingly ambivalent and can hardly be satisfied by just one means of transport. Although the car still plays an important role, it is no longer the only one. As a result of this trend, many of us are thinking about whether owning our own car pays off at all. After all, ownership is always associated with time and money. Probably every one of us wants to avoid it as best we can. Summarized: The need for an uncomplicated use of a car is therefore increasing, while the desire for an own car is diminishing.
The car designer naturally wants to continue to be economically successful. However, there is less and less demand for its products. The benefits they bring, however, are growing stronger and stronger - because society as a whole is becoming increasingly mobile. The company must therefore be able to offer mobility services in addition to automobiles. This requires a completely new business model. In order for this new service to have the least possible impact on the existing core business, it is necessary to establish a new company. Because car designers have no experience in renting cars, it is likely that partners from this industry are also needed. Together, the two partners can then develop a concept that takes into account all aspects that include the benefits of an automobile.
As the success of Car2Go shows, Daimler and Europcar have managed to exploit a societal megatrend for their own business. You cannot ignore developments that will turn your business model completely upside down in the foreseeable future or even call your core business into question with a roadmap for innovation. This tool will help you to develop your own strategies, with which you can use new developments for your business. With a roadmap, you have a kind of roadmap for your research and development activities. The instrument enables you to act in the field of innovation instead of reacting.
Conclusion: The most important advantages of an innovation roadmap
We all love and live on success. Nobody likes to call a flop a company with risks like the development of an innovation. If the actual success does not materialize, then one tries to make an alleged success out of it. But this deeply human behaviour has fatal consequences in business life. Because if supposed successes serve as role models for future developments, this rarely works well.
A roadmap for the area of innovation sheds an objective light on the fruits of your past development activities. At the same time, the instrument serves as a roadmap for the future. Therefore, a roadmap is the basis for your innovation management. Instead of reacting to trends and new developments from competitors, you can act with the help of a roadmap.
Born and raised in Vienna. Since 2012 she has been in charge of Business Development at LEAD Innovation with the functions marketing, sales and communication.