NPI: Making sure good ideas die an early death

NPI is the six-sigma term for New Product Introductions. Most companies that refer to the metric use it as the end measure of an oftentimes elaborate process to create new products. The measure is usually an integer representing the raw number of new products pushed into the market, entirely without regard to quality or consumer value.

NPI epitomizes red ocean thinking. The measure itself entirely fails to measure the quality of the "new" product, or the value to the consumer. If a red ocean marketer can get their "NPI point" by renaming the ADXL330 accelerometer the ADXL331 accelerometer they'll do just that. A Blue Ocean Innovator, on the other hand, will bundle the thing into a handheld gaming controller and sell it as a key element -- a magic wand -- in the Wii.

NPI's and six-sigma are all about the containment of risk. The processes serve partly as the antibodies of an organization, making sure that all new cells "fit" and attacking any that don't. The problem, of course, is that Blue Ideas usually don't fit at first. Blue Ocean Strategy requires you to redefine your market boundaries. Doing that, by definition, often results in products and services -- businesses -- that the rest of the organization will see as disruptive and dangerous.

The irony, of course, is that remaining with the status quo -- being stuck in a Red Ocean of product line extensions, price cutting, and the never-ending battle with suppliers, customers, etc.. -- is the real danger to the business. Much like an auto-immune disease kills its host by tricking an organisms defensive mechanisms into the mistaken belief that "good" cells are harmful, so to do "bad" business processes (and people) make a company believe necessary change is dangerous, disruptive, or reckless.

This is one business problem I don't have a suggested cure for other than to watch your people and processes, and make sure the conservative Red's aren't over-running the Blue's. B-school professors and corporate managers disagree about the extent that these people should be separated. Some believe large companies are hopeless: that they'll never adequately encourage innovation. Others believe a combination of the right policies, processes, and incentives will allow innovation to thrive.

Whatever your belief -- whether a giant company really can push out organic innovation -- (hello, Apple) or whether it's hopeless (hiya, Microsoft) -- it's important to be cognizant of the challenges and to constantly adjust your policies.