In December, we started a video series on Innovation and Product Development in today’s environment. Here is the latest video of the IP2Biz Series on Innovation and Product Development in today’s environment, CEO John Bacon discusses the complexity of going from idea to a structured plan. For the full series, click here.
In today’s business environment, there is tremendous pressure on corporations to continuously innovate with greater efficiency in order to stand out from the pack. Henry Chesbrough in Open Innovation describes a growing trend: small firms seeking to augment in-house R&D by integrating external technology into a corporation.
This is not without operational risk. While external technology partnerships can accelerate innovation, they create new dependencies and management issues. The firm and external partner must collaborate and jointly manage and control in the Front End of the development process. This is the only way a technology will successfully be incorporated into a new product offering.
In traditional Open Innovation processes, there is focus on tightly defined sourcing of technology, to enable a predefined solution. This tight focus rules out the potential for iterating into a more creative breakthrough solution. In fact there are four stages to successful effort with an external technology partner that maximizes innovation: Continue reading “How to Work with an External Technology Partner” »
A valuable landscape analysis provides sufficient actionable intelligence that enables the product development team to exploit areas of high potential for breakthrough innovation. Through examination of current customer processes, deployed technologies, and gaps or deficient areas in the landscape, a technology market analysis can be developed.
A complete assessment of the current landscape must be done to illuminate the potential success of any change. To understand the potential of creating new value propositions (either by enhancing current positions or by creating disruptive innovation that rearranges the entire ecosystem value pool), the analysis must detail: Continue reading “Effective Technology Market Analysis” »
In the drive to create innovative intellectual property or to provide breakthrough innovation in product management to drive corporate growth, ideas must be accepted and analyzed proactively. Robert Brands, President and founder of Brands & Company notes that, “Ninety-three percent of successful innovations start in the wrong direction and countless more never succeed”. Roy Rosin, Intuit‘s Vice President of Innovation further explains, “In entrepreneurship, most ideas fail, you either scale the wrong thing or you scale in the wrong direction. And it’s hard to predict.” Continue reading “Separating the Good Ideas From the Bad” »
“Innovation is currently a wildly popular, multi-faceted word in business circles. Seeking out new ideas that can be quickly brought to market for profit is as old as commerce, and the realities of our borderless, globalized world requires constant vigilance to stay ahead of competitors.” (Oliver Marks, ZDNet, 2012) So why do many Senior Executives feel that their company’s internal innovation and technology management efforts fall short? Why do many Senior Executives feel good ideas or the creation of compelling intellectual property to drive innovation in product development are not sufficiently supported or prioritized internally? Why is an internal innovation logjam hampering growth and competitiveness?
The Innovation Logjam exists due to many reasons. Some reasons include a lack of methodology of how to manage the creative process at the Front End and how to encourage creative innovation to include rejection of bad ideas with sound analysis. The Innovation logjam is further fueled by a lack of knowledge in how to embrace external technology and independent points of view to break down preconceived notions. Lack of management support for the need to manage innovation before the formal product development process is another reason for the Innovation logjam.
The currently popular Stage Gate Process for Product Development exists to define innovative product opportunities, risks, dependencies, and key elements of success. However, in an attempt to tightly manage the delivery of innovative products to market, the Stage Gate Process may have created a barrier to innovation. A collaborative process at the Front End of Innovation, before the formal Stage Gate process, allows for the inclusion of technology that exists externally from the corporation but is critical to innovation success. Collaborative efforts help to break down the rigidity inherent to the Stage Gate process and break out of the Innovation Logjam.
There are several key concepts that a team must understand before their corporation is ready for the Formal Process, and innovation is arguably the most important of these concepts. A corporation is not ready for formal development until the value of the innovation is understood. An effective innovation strategy should identify ideas that are easy to conceptualize and process. Breakthrough and disruptive innovations are not easily found, and require advanced understanding of the value proposition through a discovery process that challenges the conventional wisdom of what can be accomplished. This takes commitment to a discovery effort above and beyond what is entailed in a typical sustaining innovation effort.
The innovation process covers all activities from idea evaluation to the creation of a business model, and all of the stages in between. There is an opportunity cost to every stage executed by the corporation. Once resources are allocated, they are not available for other projects unless a different product development is halted.
For potential breakthrough or disruptive innovation, the following points are necessary:
These items provide a conceptual format and perspective on the long term impact to the corporation’s innovative process. Once the “candidate” innovation is adequately described in risk-return and strategic value, a second effort will be necessary to build internal support for insertion into the Formal Process.
Two of the objectives of the ‘definition and business case’ stage in the Formal Innovation process include clearly defining the product to be developed and completing a business plan for the specific product. At the Front End, where ideas take a more conceptual form, a determination needs to be made on the nature of the innovation. The closer a product is to ‘sustaining’ in nature, then the tighter the initial product definition can be because a narrower development may be analyzed and quickly executed upon. The market assumptions made during the concept stage can be systematically verified through additional market research and competitive analysis.
However, in the case of a potential Breakthrough Innovation, improved opportunity for success exists when the product definition idea is more loosely defined. Less definitional rigidity leaves room for creativity and allows for team collaboration and the inclusion of new technology and iterations at the Front End.
A productive innovation process starts with two things:
This process will remove some constraints of the Formal Innovation process and allow for a wider “net” of potential alternatives to be evaluated. A more loose strategic innovation analysis at the Front End could even include multiple versions of the product definition scaled to suit several different opportunity types and risk levels.
An innovation process that recognizes the need for differing levels of control that are situational will improve productivity and focus for the entire innovation effort.
Last month, we started a new video series on Innovation and Product Development in today’s environment. In the next video in our series, our CEO John Bacon discusses how the Front End Innovation is managed inside large corporations. Take a look at this video and let us know what your thoughts are! Missed the first video in the series? Click here to watch it now!
There are three key factors to validate the potential utilization of external technology in the innovation process.
‘Readiness’ is a measure used to assess the maturity of evolving technologies. Has it been sufficiently proven to be suitable for immediate application and incorporated into a solution? The Department of Defense defines several steps to help determine readiness. Some of the steps include:
Next, does the technology solution directly apply to the solution we want to achieve or does it need to be iterated slightly to enable maximum innovative potential? This is a more subjective area that requires refinement among the external technology partner and internal system solution architects and engineers. Applicability is the key to a success innovation process.
Finally, Wesley M. Cohen and Daniel A Levinthal in Absorptive Capacity: A New Perspective on Learning and Innovation, describe the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends that is critical to a successful innovation process. An objective examination must be made after the technology is deemed applicable and ready as to whether the corporation has the internal skills to truly understand and implement the innovation.