As competition intensifies and shrinking profit margins, managers are under overwhelming pressure to create value. Traditional recipes such as cost reduction, reengineering and outsourcing, although it is critically important to the problem can not be solved. The need for innovation is greater than ever, but the focus of innovation has to change, say the authors. By the synthesis of social trends and early experiments in companies like General Motors, LEGO and Medtronic, the authors paint a picture of t … Read more »

As competition intensifies and shrinking profit margins, managers are under overwhelming pressure to create value. Traditional recipes such as cost reduction, reengineering and outsourcing, although it is critically important to the problem can not be solved. The need for innovation is greater than ever, but the focus of innovation has to change, say the authors. By the synthesis of social trends and early experiments in companies like General Motors, LEGO and Medtronic, the authors paint a picture of the “next practices” of innovation, where to relocate the place of supply of products and services inevitably “experience environments. “The purpose of the experience, innovation is not per se to improve a product or service, but the co-creation of an environment in which personalized, evolvable experiences are the goal, and products and services are to enable a means to this end, . Profitable growth of the company resulting from the individual consumer co-creation of their own unique value, supported by a network of business and consumer communities. From this perspective, the authors say, the managers have to learn, existing and emerging technologies that can not be seen as an amplifier of the products, features and functionality, but as a facilitator of experiences. They provide examples of how technological skills such as miniaturization, networked communication and adaptive learning is to promote innovation experience at companies such as Sony, Apple, Microsoft and TiVo, illustrates their claim that the technology is the key moderator of the growing trend to experience innovation.
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from
C.K. Prahalad,
Venkatram Ramaswamy
Source: MIT Sloan Management Review
9 sides.
Release Date: 1 July 2003. Prod #: SMR100-PDF-ENG
New Frontier of Experience Innovation HBR case solution