Innovation is a primary driver of top-line growth. Companies t embed innovation into everything they do grow faster and are more valuable than those that concentrate on incremental innovation. But innovation is hardly straightforward. It is a complex, interdependent system that must be comprehensively viewed and managed.

Management teams can improve the front-end of innovation—idea generation—through enabling tools and technology and by establishing an underlying culture of continuous innovation. The innovation back-end—execution—is well-managed when products match customer requirements, mass customization delivers more personalized products, and new product designs are aligned with markets, customers, and regulatory requirements.

Kearney helps companies improve their ability to innovate and develop profitable new products, features, and technologies using a range of approaches:

Design cost reductions: Working closely with our clients, we establish teams to examine distinct products or product modules. These teams achieve breakthrough results using a systematic methodology that includes stripping out product features that customers want but do not pay for, eliminating excessive engineering specifications, adopting design best practices, optimizing designs to minimize cost drivers, and identifying a cost-optimal supply base to support each product.
Design for quality: We address quality issues across the board by ensuring problems are fixed right the first time while also eliminating problems that involve engineering, manufacturing, and suppliers. We also help our clients address all aspects of their warranty programs, including reducing costs, realigning terms and conditions, and limiting claims.
Engineering effectiveness: Defining core competencies, identifying efficiency gaps, and creating product development strategies are the first steps to improving engineering effectiveness. The focus then turns to reducing overall product life cycle costs by instituting earlier design stability and accelerating product delivery via concurrent product development.
Engineering changes: Product design changes if not managed properly can drain profits and compromise competitive pricing. Our work across industries includes executing a defined process to identify the root causes of design changes throughout the product life cycle, developing pricing and negotiating strategies, and tracking changes.

Research and development performance management

Global work on best practices in innovation helps the R&D function become accountable for its productivity by actively measuring key performance indicators. Strong and authoritative performance tracking allows R&D to prove its worth in tough times and be allowed—even invited—to step up to the table.

We help companies improve their R&D performance by employing lean and agile development techniques, evaluating the prospects of outsourcing or offshoring R&D activities as appropriate (while addressing intellectual property concerns), and pursuing co-development opportunities with external partnerships.

Our work also includes rebalancing R&D portfolios. This requires understanding the importance of managing the need for scale in some projects and the need to source innovation globally in others. A good strategic framework also distinguishes between crucial technologies that should be owned internally and those that require relationships with third-party suppliers or researchers or cooperative ventures.

The ultimate goal is to focus on big ideas, not just minor technology-driven tweaks, and to be ruthless about killing low-value ideas using a stage-gate review process. We help our clients get serious about local innovation and do away with inefficient global matrix organizations with conflicting roles and inconsistent profit and loss priorities.

When stage-gating and local innovation are well executed, time to market accelerates.