Sunday, 12 April 2015

Defence Innovation - how to predict success

It’s all very well posting earnest blogs about Innovator Attributes and Customer Attributes and all that – but how do they relate to each other? How does one affect the other? And does it matter, anyway?

Well, the short answer is that it does matter: as you’ll see if you read on they add up to a rudimentary model for innovation success – a set of pre-conditions, if you like, that need to be satisfied if the project is to have a decent chance of success. That means you can predict, to some extent, whether or not an innovation project is likely to succeed. Just as important, it provides a framework for a methodical approach to innovation projects and the exercise of professional judgement.

If an innovator understands what it takes, both in organisational and behavioural terms, to be successful then he’s better able to achieve that success. Similarly, in Australia’s defence market, if the customer understands what it takes to be a good customer in a high-technology developmental project then his chances of actually getting his hands on a good piece of kit at a reasonable price and within a reasonable time frame improve considerably.

The diagram below shows how these major forces intersect in a defence product innovation project.

This object-oriented model for Product Innovation Success in the Australian Defence Industry pulls together the five factors I’ve discussed in previous posts: Customer Attributes and Customer-Controlled Factors; Market Environment; and Innovator Attributes and Innovator Behaviours. The model shows how these five groups of factors relate to each other and shape the product innovation outcome.

The existence of the Customer-Active Paradigm (CAP) within Australia’s defence market monopsony means the innovation process resembles to some degree a closed cycle. Furthermore, in a monopsony and monolithic market such as defence the customer shapes the Market Environment and controls market behaviour to a significant degree.

This is the first model, to my knowledge, which attempts to integrate the CAP into a general model for Product Innovation Success in the defence industry and visualise the mechanisms by which it shapes the outcome. Its value lies, firstly, in the way it acknowledges the monopsony nature of the defence market, the paramountcy of the CAP and the resulting primacy of the Customer Requirement within it: the entire innovation process begins and ends with the customer and his operational requirement. 

Secondly, it places the innovator at the heart of the process: Customer Attributes, Customer Controlled Factors and Market Environment represent external forces acting on the innovator.

A successful innovation outcome is the product of Innovator Behaviour, influenced and shaped by intrinsic Innovator Attributes and the three external forces acting on him. And just as Innovator Behaviour is shaped by Innovator Attributes, so Customer Attributes shape to some degree both the Customer Controlled Factors and, due to the CAP and the customer’s monopsony status, the Market Environment. This means the innate characteristics of the customer are an important factor in determining product innovation outcomes in such a market.

If you’re a real glutton for punishment you could read my doctoral thesis. I can save you a bit of time and effort by pointing you to a couple of highlights: if you drill down into each of the five groups of factors that make up the diagram above, you discover (well I did, anyway) over 60 separate sub-factors that have some bearing on product innovation outcomes. They don’t all apply equally to all cases so you need to use a bit of judgement (informed by professional and technical mastery) in their application, but you do need to consider them. And probably others – this field of research hasn’t really been explored properly , in my view.

In any case, the ability to go through the 62 factors methodically and consider them all in the context of whichever project you’re involved in, or even just contemplating, gives you a rudimentary model for product innovation success. They represent a check list of preconditions which need to be satisfied – or at least examined for their relevance in a specific context – in order to maximise the chances of success.

This ‘model’ therefore has a predictive function. If the preconditions are satisfied then there is a greater likelihood of the project succeeding. Of course, plenty of projects succeed against the odds: history is replete with successful mavericks who break lots of rules, and nobody can offer a guarantee of success - I certainly don’t! And while not all factors will be critical to all projects, completing this check list is important for two reasons: first, it requires the innovator to take a methodical approach to the innovation process; and second, it requires him to identify attributes and behaviours which require change or improvement in some fashion in order to enhance his prospects for success.

It also provides a yardstick by which external stakeholders in government or the financial community can check the prospects and the ongoing health of a project.

Each opportunity to innovate is different - in scale, in technology domain, in market sector and even in the innovator’s own motivation. This model may not apply equally to all defence projects, but it does provide a framework within which the innovator can use his own judgement, informed by his market and customer knowledge and his own expertise and technical and business proficiency. It also prompts him to test his knowledge and proficiency: as much as anything else it is a challenge to complacency.

This Blog Post, and the ones preceding it this year, are based on my doctoral research at the University of Adelaide - I completed my Ph.D Thesis on Product Innovation Success in the Australian Defence Industry in 2012. The complete model is there.

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