Earlier we kicked around the idea of whether a popular business process term like “demand driven” carried any real clout after being trumpeted from sea to shining sea as the de facto way for manufacturers to run businesses. Today we look at product innovation, to see how well this oft-lauded moniker is holding up.

While most of the news focusing on the resurrection of the MG car brand is enamored with the Oklahoma location of where the cars will be assembled, there is a much bigger story here as it relates to innovation. The action of reaching back into the dusty tomes of car designs to find inspiration is hardly innovative, yet it’ll be interesting to see how Chinese carmaker Nanjing will interpret and resurrect a British auto (whose iconic TC convertible was a big hit in the United States after World War II). Also noteworthy is the fact that Nanjing is only one of several Chinese carmakers hoping to tap the global car market by setting up shop in the U.S., since demand has slowed down in their country.

So it looks like the Chinese have their collective finger on the pulse of car innovation, even if that means moving said innovation out of their own country. So how does the U.S. stack up? Well, if you’re another iconic brand like Timex, then you’re keeping good time (A pun? Oh, the horror!) with this innovation thing. Computer World dug up an interesting story about how the company is paying close attention to the needs of consumers by placing innovation, not style, on the front burner of its watch design process. In fact, Timex is using product innovation software to help it tailor new products in a rapidly changing marketplace.

Bernd Becker, vice president of product development at Timex discloses in the article why his firm invested in product innovation software:

[Project information] was hard to get, and you could never be sure that it was up to date or not. In the past, [innovation] was driven by research and development, so there was lots of disconnect between R&D and brand managers. That’s a typical problem in many companies because engineers and brand managers talk in different languages.

Timex now has about 45 projects being tracked and developed with the software so far. Some are watch design projects; others are feature innovations. It will take between six and 10 months for the first Timex watch project to be completed and sent to market using the software, Becker said.

This news release about positive quarterly gains at Sealy Mattress also hints at innovation being the driver for the influx of cash. Net sales for the fiscal quarter ended May 28, 2006 increased 5.9 percent to $376.7 million from $355.9 million for the comparable period a year earlier. Domestic net sales increased 2.5 percent to $291.5 million as average unit selling price improved 9.0 percent.

Said David J. McIlquham, Sealy’s Chairman and Chief Executive Officer:

As we have previously communicated, product upgrade cycles typically impact unit volumes in the short term as our retail partners transition the beds on their selling floors. Over the long term, such new product innovation is an important driver of our growth.

Unlike yesterday’s public flogging of the term “demand-driven”, looks like product innovation is alive (though how well?) in the U.S. How are innovation strategies taking shape at your company?