What Does the Innovation Management Process Look Like

What Does the Innovation Management Process Look Like

The innovation process

1. Creating a vision

A lot of companies start innovating by brainstorming on all kinds of new products. But a successful innovation process looks a little more sophisticated. First of all you need to have a look at the vision of an organisation. To do so we can use the POM model as thinking model:

Figure 1: POM-model, a thinking model developed by Smart Group. P= product, M= Market, O = organisation

With this model an organisation can more easily create and define its vision, its opportunity.

The first step in defining the key opportunity is to start with the M (market): what is happening in the market (in the broadest sense)? What are trends, what is happening in your market, what is happening in other related markets? What about your competitors (in the broadest sense)?

Then look at the P (product): what products (or services) does your company sell, what are the benefits, the strengths, what is the uniqueness? What about assortment etc

Then take O (organisation) into account: what are the strengths and weaknesses of your organisation/company, how do you organise your processes (primary, secondary), how well is the organisation in translating trends to the own operation etc?

Actually, this relates very well to the well-known SWOT analysis. The Strengths and Weaknesses (SW) are internalfactors, just like the P and the O in the POM analysis. The Opportunities and Threats (OT) are external factors, in fact the M in the POM model. A proper analysis, either using SWOT or POM (or any other model that takes both internal and external factors into account), will link the internal and external factors. It will prioritize opportunities, by looking whether the internal conditions are suitable for grabbing the opportunities.

Using the POM model will lead to vision, to a limited amount of opportunities, and innovation has to be in line with the defined vision/opportunity. Otherwise it is just hoping for a lucky shot, and that might lead to a lot of expensive failures.

2. Sustainable innovation

Sustainability is one of the aspects to be taken into account when looking at POM. What is happening in the world? What is happening to raw material prices? What is happening with respect to energy sources? How sustainable are your own products? How much energy is needed to produce your products? Which raw materials are used? Are these materials toxic in any way? And what about your organisation? How well is sustainability embedded in the culture of the organisation? How well are employees trained in sustainability aspects?

Another way to get insight into the impact of sustainability on your organisation is to used the Triple E model. Triple E stands for Economy, Ecology, Equity and is equivalent to People, Planet, Profit, and those 3 aspects all need to be taken into account when talking about sustainability. How sustainable would it be to close a factory that is polluting the air and dumps toxic waste water? For ecology (planet), it would be better to close the factory, but that would not be sustainable economically spoken (profit,), nor would it be sustainable with respect to equity (people, social aspects), when all the employees lose their jobs. A real sustainable option would be to see what could be changed (e.g. replacement of toxic raw materials by non-toxic or natural alternatives) to maintain the factory, to maintain the jobs of so many employees and to eliminate toxic waste water and toxic exhaust.

The 3 E’s should not only be looked at within the company boundaries, but a bit broader. For instance, the ICT sector prevents usage of paper (digitalisation), prevents logistics (sending documents via postal mail), but on the other hand causes a high energy usage (think of the heat that is lost with all those servers!). And what about all the hard ware that is dumped as waste after a short life cycle?

Figure 2 shows for companies in the ICT sector what the impact of their activities can be for all three E’s. In such way, any company could be analysed along the three E’s.

Figure 2: Impact of ICT activities on all three E’s

3. A smart start of the innovation process

But how are you going to pursue a process that ensures innovation being based on an identified opportunity.

Dr. Ir. S.A.M. van Stroe-Biezen developed the front-end of an innovation process, called the Triple Diamond Process, that follows logical steps of translating opportunities into customer needs, and customer needs into new ideas/products/services.

Figure 3: Triple diamond process for innovation: Opportunity Generation (diamond 1), Insight Activation (diamond 2), Idea Generation (diamond 3)

Diamond 1

As said, the POM exercise will yield a number of opportunities for your company, and so you need to choose (focus!) on one, two or three opportunities (this is the essence of the first diamond). Moving forwards into the innovation process, you only use one opportunity (if you want to follow up on more than one, you go through the model several times in parallel).

Diamond 2

The opportunity you have chosen is the basis for the second diamond: Insight Activation. You need to have insight in the deeper needs of your customer to be able to understand in what direction you have to innovate. Listen to what Henry Ford once said: if I would have asked consumers what they wanted, they would have said “faster horses”. The consumer would have jumped into the same pitfall as a lot of companies: jumping to solutions, to ideas. Henry Ford developed the car: he knew that the deeper need of the consumer was to get faster from place A to place B as time became scarce. But of course the consumer could not articulate the needs for a car, as he did not even know what a car was at the time. This illustrates how important it is to search for the deeper needs, i.e. the insights of your customer. In fact, everything you see, hear, read about your customer are factual observations. But what do these observations mean? They are just symptoms of a certain cause. The cause is the deeper lying need of the customer, and if you are able to find this, you’ve reached the customer insight level. It’s like going to the physician when you suffer from headaches. Before the physician jumps to solutions, he will make a diagnosis first, he will look for the cause. Do you have a bad eye-sight? Do you suffer from a lot of stress? Only then, he can cure. Actually, with observations and insights it’s the same: observations are on the level of “what”, of “symptom”, of “consequence”. Insights are on the level of “why”, of “diagnosis”, of “cause”.

Insight activation is not an easy process, in fact it is the hardest diamond of all three. But it can deliver most fun, and moreover, it is so intense, that the learning effect is largest. You will learn very much about your customer, and you and your team will speak the same language with respect to the customer and his/her needs.

Diamond 3

If you know your customers needs, then you can start creating new ideas on how to fullfil these needs: we have reached the third diamond of idea generation.

Based on customer insight we can start generating ideas, that really provide an answer to their needs. In this process, but actually in all diamonds, we need creativity to come up with out of the box ideas. Otherwise, we keep on thinking in the same way. Techniques to step outside the box are for instance:

▴looking at related world (how did other companies, industry sectors fill in the same need/insight?)

▴random association (e.g. brainstorm on associations you have with a randomly chosen object or subject, than relate the mentioned associations back to the idea generation)

▴step inside someone else’s shoes (what ideas would president Obama or a 9-year old come up with?)

To be able to go through the triple-diamond process it is vital that you keep your ears and eyes open, learn from others in the field, see what is happening around you, steal with pride from related sectors etc.When creativity comes in, it is important to make use of diversity in thinking, so working with a diverse team is essential. Companies like Unilever event invite consumers in the process of idea generation, and consumer-based innovation via internet are well-known.

The triple diamond model helps companies to focus innovation on real opportunities and real customer needs. Too often, innovation is just a lucky shot, or based on somebody’s hobby horse.

Companies that have gone through the triple diamond model will celebrate a smart start of their innovation process!

4. The innovation process

The triple-diamond process is the smart start of the innovation process. It’s the first part of the innovation funnel (see figure 4), the so-called ideation phase. The next phase is about exploring the feasibility of the ideas generated during the ideation phase. So a quick scan of financial feasibility is carried out, but also first pilot technical experiments are carried out, when applicable. After the feasibility phase comes the capability phase, which is about taking the feasible ideas (technically, economically etc) one step further, so building a solid business case, taking lab scale experiments through pilot plant experiments and full scale experiments etc.. Going from one phase to the other always comprises a go/no go decision, and a narrowing down of options (that’s why the process is called a funnel, it’s getting narrower along the way). The launch phase follows the capability phase, the new product/service will be put on the market. An often neglected phase is the post-launch phase. What happens with the innovation on the market, are sales as expected, or higher/lower? What is the reaction of the customer, what of the competitor? This will yield a lot of learnings for future innovation processes.

Figure 4: the innovation funnel, with the Triple Diamond Process as starting point (ideation phase)

January 2010

Dr. ir. Saskia van Stroe-Biezen

Professor of Innovation Management

Fontys University of Applied Sciences

International School of Education