Getting my innovation adopted by the market:What is the winning strategy?

Written par

GdeGConsulting

in

Innovate

The litmus test of the innovation market launch

The market launch of an innovation aims to accelerate its adoption by the market. It is a moment of truth on the company’s performance: the market launch will reveal the true value of the innovation process, the flexibility of the industrial and logistics operations, the talents and experts, the salespeople, the marketing, and the relevance of the strategic choices made by the general management.

The choice of adoption levers, and their effectiveness, will depend upon the characteristics of the market, the role the company plays in the market, and its ambitions:

• The characteristics of the market: depending on whether it is emerging, growing, mature or declining, the type of innovation and the adoption strategy will vary. In an emerging market there is a Darwinian selection between different technical offerings. In a mature market, more educated customers may have more selection criteria than the technology. Service, price, may matter more.  Besides the market maturity, the competitive intensity will raise the amount of effort required to convert customers and the role of price.

• The company’s position in the market: depending on whether it is dominant or marginal, long-established, or newly arrived, different levers of legitimacy and reassurance will be actuated. The challenger will have to demonstrate item by item that its product beats the market reference, and to help customers to switch to their offer.

• The role of the company in the market: does the company play a leading role, or does it depend on the actions of other players? Does it have partners, influencers and relays of influence which champion its solutions? What is its image: prestigious? at the cutting edge of innovation? respectful of its commitments? Here again, adoption levers vary according to the answer.

• The competitive advantage sought: this can be of three kinds
  • Becoming the product leader: offering the reference that is the market leader because of its superior performance. Market adoption means imposing the technical standard by filing patents, lobbying, and communicating to enhance the perception of better performance than the competition.
  • Becoming the cost leader: market adoption is about offering the best price, whether it is a purchase price, a usage price, or a full cost of ownership.
  • Becoming the leader in customer experience: the quality of the relationship with the customer and the performance of the service are such that the customer is loyal and does not even consider reverting to competitors. They are often volunteering to take part to the innovation design and development process, and are actively suggesting improvements. Adoption is more about keeping customers loyal by creating shared value.

Market adoption levers

The range of innovation adoption levers available is wide, and can be classified by level of marginal cost:

• Low cost: here we find all the existing business skills and operational routines:
• Direct sales by sales teams.
• Marketing and communication tools: brochures, customer presentations, website content, social media posts, trade shows and conferences, press relations.
• Average cost: they require the contribution of external stakeholders:
  • Innovation collaborations with beta-testers, customers, or major market players: these are often reference customers which agree to field test the innovation and, if necessary, to communicate on the added value provided.
  • Identifying, training, and supporting specifiers (distributors, system integrators, experts).
• High cost: they translate into investments, or into important, long term, efforts. These include in particular:
• The massive launch marketing campaigns, spread over the world and over time.
• The technical and normative lobbying to impose a technical standard. This can require a sustained effort of up to 10 years.
• The acquisition of a competitor that threatens the market success of the company’s innovation. 

The weight of external circumstances

The company cannot control all the triggers to have its innovation adopted:

• The decision is in the hands of the customer. When the customer is a large company, the process of conversion to innovation can be long and complex. Purchasers, technical prescribers, users, and decision-makers may have divergent positions and interests. Power games and arbitrations are often opaque for the supplier.

• The context of the moment is paramount, whether it is geopolitical, environmental, climatic, economic, regulatory, or technical. Needless to say, a difficult economic situation makes customers more sensitive to cost. A shortage of a commodity favours innovative alternative solutions that do not use it. The startup BioNTech is a case in point: The company which works on messenger RNA seemed destined to remain marginal. BioNTech turnover has mushroomed in two years from 109 million to 19 billion euros thanks to the Covid-19 crisis.

• Competition does not remain idle. One must fear and anticipate the counter-offensive of the main competitor, which can wreck all efforts done to convince the market. Conversely, the competitor may be going through a reputational crisis, a thorny technical problem, a dispute with a client, etc., which may become an unexpected window of opportunity to convert clients and make inroads.

No martingale

With so many unmanageable factors, there is no predetermined winning strategy, no martingale. A great, carefully crafted strategy will always have weaknesses:

• Given the speed of change in the environment it will be obsolete as soon as it is designed.
• It will freeze certain paradigms. Underlying assumptions will be forgotten, or transformed into truths that will not be easy to challenge. The company will be locked into a blinkered vision, which will not allow it to decrypt unexpected events and to properly react.
• It can be costly, seeking to mitigate all likely risks, and by framing initiatives so tightly that opportunities cannot be seized.
• Determining a strategy to impose an innovation may in fact hide the quest for a market rent.

The ingredients of success

The strategic decision should preferably focus on the creation or reinforcement of strategic strengths: How to create a breeding ground for innovation? How can we interact with the market to make the adoption process more fluid? Management experts agree on the need for a systemic approach. This approach is based on ingredients on which there is consensus. These include in particular:

• Fostering market and customer orientation in all decision-making milestones of an innovation project.
• Training stakeholders in the postures, thought processes, and tools for managing an innovative project in an uncertain context.
• Encouraging collaboration to resolve technical issues and reduce step by step market uncertainties. These collaborations are either internal or external.
• Developing human skills that are essential for innovation: these are at the level of the individual, the organisation, and the group, and include
  • cognitive skills, i.e., the ability to process information to think about change
  • conative skills, to act,
  • skills enabled by the work environment
  • emotional intelligence, to understand needs
  • relational skills, to engage groups.
• Implementing a formalised management process for innovative projects

These ingredients are prerequired for success:

• Cognitive skills ensure that the company knows its subject, and relies on documented technological and business expertise.
• The attitude of openness, empathy and listening enables the company to detect and understand market trends and unmet needs.
• The skills enabled by the work environment will allow a culture of trust to emerge. Initiatives will be encouraged, and intrapreneurs will appear.
• The relational skills will enable to bring on board internal and external experts and partners, thus limiting risks. It will enable the engagement of collectives outside the company, in particular alliances and partnerships.
• Innovation management tools and processes will give everyone a common framework and language, and a toolbox that is part of the collective know-how.

Successful market adoption of an innovation must be understood in a broad framework, beyond the scope of responsibility of sales and marketing managers. It will always remain in the hands of the latter to fine-tune the balance between voluntarist promotion (the push strategy) and motivation and enticement (the pull strategy). This manoeuvring finesse, which factors in the current context, will be more effective if it is based on a company that has a strong and pervasive innovation culture. Like a surfer, the innovative company will be able to catch the right waves and ride their crest for a long time, whatever the strength of the elements.