spring2016-issue-product-development-1200

Spring 2016 Issue
Volume 57, Issue # 3

Access the full Table of Contents below.
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Special Report: New Product Development

Simester-Fail-1200

Why Great New Products Fail

Companies often don’t focus enough on understanding how customers decide what to purchase.

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Gandhi-Hear-Product-1200
Jha-Develop-New-Products-1200
Balle-Sustained-Innovatioin-1200

Letter from the Editor

Getting Product Development Right

March 15, 2016 | Martha E. Mangelsdorf

The Spring 2016 issue of MIT Sloan Management features a Special Report on new product development. Articles include “Why Great New Products Fail,” “Finding the Right Role for Social Media in Innovation,” “Developing New Products in Emerging Markets,” “Why Learning is Central to Sustained Innovation,” and a look at the opportunities presented by the Internet of Things, in “Now That Your Products Can Talk, What Will They Tell You?”

Also Featured in This Issue

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The Metrics That Marketers Muddle

Despite their importance, five popular marketing metrics are regularly misunderstood and misused.

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Hanson-1200

Leading by the Numbers

It can be difficult for finance professionals to transition to broader leadership roles.

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Intelligence

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Zalmanson-Content-Viewers-Subscribers-1200
Stanko-Oculus-Virtual-Reality-Crowdfunding-1200
Walther-Reconnecting-Maximum-Impact-Networking-1200
Davenport-Smart-Machines-1200
Sampere-Debating-1200

Debating Disruptive Innovation

Three experts provide their responses to the article “How Useful Is the Theory of Disruptive Innovation?”

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spring2016-issue-product-development-1200

Getting Product Development Right

  • Opinion & Analysis
  • Read Time: 2 min 

The Spring 2016 issue of MIT Sloan Management features a Special Report on new product development. Articles include “Why Great New Products Fail,” “Finding the Right Role for Social Media in Innovation,” “Developing New Products in Emerging Markets,” “Why Learning is Central to Sustained Innovation,” and a look at the opportunities presented by the Internet of Things, in “Now That Your Products Can Talk, What Will They Tell You?”

Simester-Fail-1200

Why Great New Products Fail

  • Research Feature
  • Read Time: 18 min 

Many innovative new products don’t succeed. One common reason: Companies don’t focus on understanding how customers make purchase decisions. But paying attention to how customers search for information about what to buy, and how they make guesses about details they can’t easily find, helps predict whether customers will embrace certain product innovations. Companies need to focus on innovations that customers will easily recognize or find ways to alert them to innovations they may not detect on their own.

Roberts-social-media-1200

Finding the Right Role for Social Media in Innovation

  • Research Feature
  • Read Time: 20 min 

Social media provides a game-changing opportunity to support new product development. But taking advantage of the opportunity requires more than just a Facebook presence with a loyal base of “friends.” To use social media for innovation, organizations need clear strategies and objectives. They also should look beyond social media used by the general public to lesser-recognized platforms, such as special user forums or expert blogs, for especially valuable user-generated feedback.

Gandhi-Hear-Product-1200

Now That Your Products Can Talk, What Will They Tell You?

  • Opinion & Analysis
  • Read Time: 4 min 

Products connected to the Internet of Things are providing unprecedented levels of information that can be used to improve both products and customer experience. For instance, a company does not have to wait until a customer calls with a complaint to know that a product connected to the Internet of Things is not working correctly. Instead, the product could already communicate the information, giving the company the ability to provide proactive service. Result: more loyal customers.

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Developing New Products in Emerging Markets

  • Research Feature
  • Read Time: 23 min 

How can multinational companies turn ideas from their emerging-market subsidiaries into global products? A successful innovation developed by Cisco’s R&D unit in India offers practical insights into how to make that process work effectively. Key enablers in the Cisco case included well-developed R&D capabilities at a company center in Bangalore, a large market opportunity, and the support of executive champions. The process also demanded clarity about what product to develop, and how — including working on a shoestring budget.

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Balle-Sustained-Innovatioin-1200

Why Learning Is Central to Sustained Innovation

  • Research Feature
  • Read Time: 22 min 

Many managers think they can create better products just by improving the development process or adding new tools. But it’s skilled people, not processes, that create great products. So-called “lean” organizations invest heavily and continuously in the skills of product developers, and rather than developing single products, they think in terms of streams of products. By making people the backbone of the product development system, companies can achieve a triple win: increased innovation, faster time to market, and lower costs.

Bendle-Marketing-Metrics-1200

The Metrics That Marketers Muddle

  • Research Feature
  • Read Time: 23 min 

Well-defined metrics are critical to effective marketing. However, despite their widely acknowledged importance, five of the best-known marketing metrics — market share, net promoter score, the value of a “like,” customer lifetime value, and ROI — are regularly misunderstood and misused. This confusion undermines the marketing discipline’s reputation for delivering results. The authors present Do’s and Don’ts for using these metrics and flow charts with detailed advice for developing each metric.

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Learning the Art of Business Improvisation

  • Research Highlight
  • Read Time: 7 min 

The ability to innovate and rapidly respond to changes in the business environment is critical to competitiveness and success. Improvisation and experimentation combined with focus and flexibility are needed to identify new business opportunities and effectively execute projects. But while improvisation may seem to be spontaneous, managers can foster it through the deliberate development of certain processes and capabilities in an organization’s culture, team structure, and management practices.

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How Crowdfunding Influences Innovation

  • Research Highlight
  • Read Time: 8 min 

Crowdfunding is changing how entrepreneurs bring new products to market. It has allowed thousands of innovating entrepreneurs to raise money, build brand awareness, and join a broader conversation with large numbers of potential backers — all while still in the product development process. But crowdfunding’s potential goes beyond financing and marketing. The people who back projects can also be important sources for product feedback and ideas.

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Just How Smart Are Smart Machines?

  • Research Highlight
  • Read Time: 14 min 

Managers don’t expect to see machines displacing knowledge workers anytime soon. Instead, they expect computing technology to augment rather than replace the work of humans. But in the face of a sprawling and fast-evolving set of opportunities, what forms should that augmentation take? Davenport and Kirby, authors of “Only Humans Need Apply: Winners and Losers in the Age of Smart Machines,” examine what cognitive technologies managers should be monitoring closely and what they should be applying now.

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Debating Disruptive Innovation

  • Opinion & Analysis
  • Read Time: 18 min 

Few MIT Sloan Management Review articles garner as much attention as Andrew A. King and Baljir Baatartogtokh’s “How Useful Is the Theory of Disruptive Innovation?” After surveying 79 industry experts, King and Baatartogtokh concluded that many of the cases cited as examples of disruptive innovation by Harvard Business School professor Clayton M. Christensen and his coauthor Michael E. Raynor did not fit four of the theory’s key elements well. Here, three experts provide responses to continue the conversation.

“How Useful Is the Theory of Disruptive Innovation?” was the question raised by an article in the fall 2015 issue of MIT Sloan Management Review. In this issue, several more experts weigh in on the topic.

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Leading by the Numbers

  • Research Highlight
  • Read Time: 5 min 

It can be difficult for finance professionals to transition to broader leadership roles. Leadership development, it turns out, is different for people from finance backgrounds. But five changes in how they approach their job can help them succeed when taking on broader roles in an organization. Those changes include transitioning from being the expert to being someone who leverages expertise, and being able to unleash their thinking to see that a problem can have multiple plausible solutions.

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How to Reconnect for Maximum Impact

  • Research Highlight
  • Read Time: 7 min 

Reconnecting with people from previous chapters of one’s life (such as former colleagues, old friends, and other associates) is as valuable, if not more so, than connecting with currently active ties. But some reconnections are more beneficial than others. The challenge: selecting the best ones. The most valuable reconnections often turn out to be people who provide novelty, which can mean reaching out to reconnect with higher-status people or to people you didn’t know very well to begin with.

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Turning Content Viewers Into Subscribers

  • Research Highlight
  • Read Time: 10 min 

Content websites can more readily convert site visitors into paying customers by prompting visitors to gradually increase their social engagement with the site — using a concept the authors call the “ladder of participation.” This means thinking strategically about using site engagement to improve conversion. It also means taking an active role in encouraging users to climb the ladder of participation and move quickly up its rungs.

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Keep Calm and Manage Disruption

  • Research Feature
  • Read Time: 21 min 

Disruption can be averted, and many businesses manage through it by beating the new competition, joining them, or waiting them out. “To be sure, facing disruption is no picnic,” writes Joshua S. Gans, author of The Disruption Dilemma. “But it also isn’t the existential threat that so many see it as.” Many businesses are finding ways to weaken disruptive events, sometimes by investing aggressively in the new innovation after entrants had brought it to market or by acquiring the entrants and the actual disruption.