Best in Class for Dummies

Geoffrey Moore recently posted that “’best in class’ is a sucker bet,” meaning that applying resources to develop a best-in-class product does not provide a valuable Return on Innovation.

Moore states that only three innovation strategies are worth a company’s time:

• Differentiation
• Neutralization
• Productivity

This will no doubt start several debates as Moore’s words spread through the blogosphere.

Like most rigid declarations, in some cases Moore’s theory holds and and in some cases it doesn’t. I have no doubt that there are many examples where the pursuit of Best in Class was not worth the effort spent (Moore gives IBM and HP’s pursuit of the best PC as such an example in his response to a reader’s comment). Randy Cronk disagrees with Moore and suggests that luxury brands are counter-examples.

I suggest that fields that have strong indicators of which products are best in class will also provide returns on innovation—the automobile industry is one such an example. Another example is the field of medical devices and biotech, where product decisions are based on patient indications and clinically-proven patient benefits. An increase in efficacy of a new treatment over current solutions can result in large product success without requiring any of the three strategies that Moore defined.