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Why large businesses struggle with innovation – insights from Samsung

Why large businesses struggle with innovation – insights from Samsung

By Eric Schaeffer and David Sovie who are Senior Managing Directors at Accenture. Digital technology is highly disruptive, yet simultaneously the biggest opportunity to reposition product-making companies. Eric Schaeffer and David Sovie of Accuenture gathered insights from leading companies on how they were handling this challenge when working on their new book Reinventing the Product.

By Eric Schaeffer and David Sovie who are Senior Managing Directors at Accenture.

Digital technology is highly disruptive, yet simultaneously the biggest opportunity to reposition product-making companies. Eric Schaeffer and David Sovie of Accuenture gathered insights from leading companies on how they were handling this challenge when working on their new book Reinventing the Product.  

Here’s what they learnt in a conversation with Yoon Lee, Senior Vice President and Division Head Content and Services, Product Innovation Head at Samsung Electronics America.

Home appliances, your remit at Samsung, are becoming increasingly smart and connected. How does innovation work under these conditions?

Broadly speaking, refrigerators, washing machines and dishwashers innovate along with lifestyle trends. But these consumer trends change at an increasing rate in the digital world so that innovation processes have to pick up speed. Two traits prevail in today’s home lifestyle. Number one: everyone is connected. Number two: the kitchen has turned into a hub.

It has fundamentally changed from being a place for cooking into one for serving and finally into one for eating and living. Most of today’s homework is done in the kitchen, and the most amount of family time is spent and communication exchanged there. We innovate products to remain compatible with those fast-moving market trends by intertwining physical and digital more and more.

That sounds like you only react to trends. Isn’t innovation also about creating value for users that they have not discovered yet?

Innovation in our area is, realistically speaking, always a mix between the pushing of technological boundaries on our part and permanent demand for novelties from the consumer side. You are right: what consumers can imagine is in many cases primarily encapsulated in their past experience. In other words, they do not yet know what they do not know.

Picking up on Henry Ford’s famous quote, consumers will say ‘I want a faster horse’ while the unspoken intention was to say ‘I want to go faster from point A to point B’. Consumers will never be able to articulate that they want a car. The experience does not exist. It is our task to bridge that literal gap and proactively push for that extra bit of innovation that truly makes a product, the intended car and not just a fast horse.

How do you square the technologically possible with the genuinely desired by the consumer?

Innovation that is only driven by consumer pull tries to mend pain points identified via research or real-time data analytics gathered from connected appliances. It is a lot easier to do because once the pain points have been identified you can keep the course as you aim at a clear innovation target. Pure technology pushes, on the other hand, tend to run into that initial reluctance hurdle, as consumers have no experience with the novelty yet.

They tend to see the functional side at the beginning. Only gradually is the elegant experience discovered that comes with the innovation. We need the early adopters to kick-start a new product in the market. They care less about the experience, whereas the mass-adopting customers of a later stage very much do so. Innovation in our field is always a balancing act – there is our push and there is their pull, there is Yin and there is Yang.

innovation

Does data analysis feature large in Samsung’s innovation processes?

Consumer listening is an important part of innovating home appliances. We do have data analytics teams. We have teams doing core research. We have teams who improve data analytics algorithms. We employ specialists looking into the data to come up with useful insights. And we have regular meetings on how to improve products based on these findings.

To provide AI cores to products and services is currently the biggest push of our innovation units. I see the main difficulty in the fact that consumer markets change all the time. The minute that you think that you figured it out and can march forward you put your head up and everything has changed again. I have worked for B2B manufacturers before and that happens less there, which makes innovation easier for those businesses.

 

How do you rate Samsung’s overall innovation ability?

As Samsung moved into the leadership position in consumer electronics, it was clear that the only remaining guiding light was the consumers. The product innovation teams were created in 2006 and the organization learned to properly read markets and consumer minds. It added getting something from research to market at relative speed to its core competencies.

Then came the phase where ‘rapid experience design’ was introduced. With the arrival of rapid prototyping tools, both hardware and software, you would start with technologies first, to quickly build ‘experience’ for consumers to experience first and provide feedback to validate the unarticulated needs before proceeding with locking down the final product development specifications. It patched the problem that those who are doing consumer research have all technical capabilities to read what is going on in the air, but no technology competency to quickly translate those findings into tech solutions. So marketing and technology were eventually married very effectively.

Based on that, how would you define the current innovation phase?

All three stages I described were outward facing and developing our skill sets. The fourth innovation phase, today, is to put hardware, software and the entire business model into a new way of life within the company. This demanded that we completely change our culture of doing things in a holistic way from top to bottom.

Does it sound as if that stage is the most ambitious of the three?

It means applying really revolving forces to the old ways of doing business throughout the organization. Innovation agility becomes the top agenda point. We need to be so quick as time has shrunk and clocks sped up. What once was a day of 24 hours has gone down to about three hours today. Human awareness, adoption, consumption and disposal of everything has become so fast that one day is worth three days in 1980s’ calibration. That is why agility has become so important.

Eric Schaeffer and David Sovie are Senior Managing Directors at Accenture and co-authors of a new book, Reinventing the Product: How to transform your business and create value in the digital age, published by Kogan Page.

You can read our review of Eric Schaeffer and David Sovies new book here:

https://irishtechnews.ie/reinventing-the-product-how-to-transform-your-business-and-create-value-in-the-digital-age-reviewed/


If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at [email protected] or on Twitter: @SimonCocking



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