Western companies tend to make substantial and basic changes that involve a lot of research and analysis. A new product launch often represents a considerable investment. New features and products are carefully developed and integrated into the companies’ existing offerings, and a great deal of analysis and research is made up front.
Combined with the need to honor the expectations of the brand, this means that new products typically take 2-3 years – or more - to develop and launch.
In contrast, the innovation process of an Asian company will tend to be in smaller increments, making adjustments and adaptations based on immediate market demands and using existing technology. It is rare that companies spend much on in-house basic research. New products can be developed and launched in a 6 to12-month timeframe – or even less.
Generally, Asian companies seem to organize projects in shorter intervals, with frequent deadlines and reviews. This may be one of the reasons for the greater sense of daily urgency that Asian employee seem to have.
If a project runs for 3 years, it is not so important if a particular job takes 3 weeks rather than 2. But if you need to launch in 6 months, a delay of one week becomes critical.
Asian and Western industries operate at different rhythms of change. In the long-term, a Western company may move forward just as quickly as a Asian competitor, but the Asian companies will react and make small adjustments to changing circumstances much faster.
Only large steps are allowed
The organization of a mature Western company will often be set up with procedures that only permit rather large increments. As a development project moves between departments, it has to fit in with the scheduling. So each step takes a certain time, and it would be very hard and disruptive for other projects to short-circuit the standard procedures.
Any changes in a product will have consequences in many different departments and perhaps even in partner companies, as production, marketing, invoicing systems, etc. have to adjust.
Some Western companies will have explicit policies of not spending efforts on developing new projects below a certain size or potential revenue – for instance, 100 million DKK. Making small changes is simply not worthwhile.
Granularity
One way of expressing the difference between the Asian and Western approaches to innovation is in terms of ”granularity”.
Operating with a finer granularity can be summarized in some of these characteristics:
- Smaller increments in product development
- Shorter deadlines, shorter term goals
- Fast launch to the market
- Short-term ROI
- Smaller bets on next version of product