Frustrations with the pace of innovation at your company—what we call the Innovation Logjam—are often driven by a lack of institutional understanding of the innovation process. Your Formal (Stage Gate) Process is specifically designed to get Sustaining Innovations to market efficiently, and you are probably pretty good at it. These are the innovations driven by customer demand and market intelligence that you must make to keep the market share you already have.
But Breakthrough and Disruptive Innovations arise from a different process: Front End Innovation (FEI). These are the innovations that let you increase your market share (Breakthrough) or define entirely new markets and—in the process—destroy existing competitors (Disruptive). FEI is the essential work that must occur to evaluate a new product, process or market before an accurate business plan can be developed, budgets can be set and ROI can be calculated.
Figuring out if you are in the Formal Process or FEI is pretty easy: if you have a complete understanding the technologies, industries and markets (TIM) where your new product will launch and, hopefully, thrive, you are in the Formal Process. If, however, your understanding of TIM is incomplete in any of these areas, you are in the Front End and the idea is unlikely to survive the Formal Process even if it is a proposal with great promise. The reason for this is straightforward: the “certainty of success” level of FEI projects falls well below the tolerance threshold of the Formal Process, and it will likely be starved before it can mature.
This, then, is the goal of FEI: reduce uncertainty enough that your company’s immune-system response to untested ideas will not attack and destroy potentially lucrative Breakthroughs. Through the FEI process, you develop a complete understanding of TIM, and this—in turn—allows you to make rational predictions about its possibility of successful commercialization. So how does FEI work?
FEI is an iterative, three-step process: Envision → Investigate → Decide. The Envision phase is simply the birth of an innovation idea. The Investigation phase is where you develop your understanding of TIM for the proposed innovation, rapidly discarding ideas that analysis shows will not be successful. The ideas that make it through to the Decision stage are supported by a newly-developed, complete understanding of TIM achieved rapidly and at minimal expense; translational R&D work on these ideas is money well-spent.
Unfortunately, FEI is not quite as easy as the preceding paragraph makes it seem. Even if your team understands FEI, existing staffing levels were designed to support the important demands of the Formal Process, and team members don’t have the time or resources to attack innovation ideas that don’t follow the same rules. But there is a solution: existing team members (in the form of ad-hoc teams) can do the job if they get independent assistance from FEI experts to augment their understanding of TIM for proposed breakthrough ideas. Who are the FEI experts? Well . . . we are.
So don’t let anybody tell you that to make your company innovative you have to change your culture, change your processes and change your organization. You don’t. All you need to do is take your existing team, your existing processes and add FEI discipline. You will immediately gain the ability to rapidly and efficiently sort the innovation wheat from the innovation chaff and make investments in the ideas that lead to growth.
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