Innovation As An End-to-End Process

By M. Isi Eromosele

Innovation is value-creating process. It must be new, but it should also create value for the business. The key is for a company to leverage its capability at all levels within the organization and to increase the speed and scope of idea generation and transformation into marketable products that result in new business value.

Unless an innovative idea for a product, service or business model is carried through to the customer, it will fail to generate cash or other value for the enterprise. It is therefore a process, rather than an activity.

The rise of open collaboration cultures at companies such as Apple, Amazon and Starbucks has begun to create awareness of innovation as a process that starts with ideas. Many companies are now making good use of feedbacks from their customers and suppliers to broaden the source of ideas for enhancements to existing products or entirely new products.

In the journey of creative and successful innovation, ideas, whether incremental or radical are just the beginning and they need to move from discovery to impact on the business. Managing a set of ideas beyond discovery through logical phases of incubation, acceleration, and scaling are the execution steps upon which most companies falter.

The following summarizes the key activities in each phase:

Discovery phase - The primary purpose here is the exploration, identification, ideation, screening, and selection of ideas to determine feasibility and create a proof of concept. A key problem is to generate a constant flow of ideas. Driven by open innovation paradigms, the sources of ideas increasingly include customers, suppliers, partners and other external organizations or individuals. This open collaboration model has become a best practice among innovation leaders.

Incubation phase - This phase eliminates technical risk by creating working prototypes and pilots and explores additional ideas regarding the value proposition among buyers, users and beneficiaries. Companies that do not address problems in this phase are unlikely to advance innovations beyond discovery. The prototypes and pilots provide the basis for conducting additional product and market research to develop a robust business plan for the innovations needed to advance to the acceleration phase.

Acceleration phase - This phase eliminates the initial commercial risk by demonstrating that there is a meaningful market among various target segments. As such, this phase requires a large commitment of resources and time. As such, problems related to commercialization of a product, process or services are solved here. The team applies more formal structures and practices to ensure greater discipline, yet remains flexible enough to exercise agility in adapting the product, process or service to the market’s needs.

Scale phase - In this phase, the primary problem to address or the risk to manage is the size of the market opportunity. The result of the acceleration phase will now be fully established as a core product or service offering.

Challenges and risks facing an innovation don’t stop if their nature changes during different phases of the life cycle. All great ideas sourced in the discovery phase will encounter numerous execution challenges in all phases or problems that need solutions, for which structured problem solving can deliver dramatically better results.

It is important to note that only a fraction of ideas move through the full life cycle, not all ideas can overcome all challenges and risks encountered during their development. As few as one in a hundred seemingly great ideas may eventually succeed and become a commercial offering.

Built into disciplined problem solving are mechanisms to drop ideas when core problems have been exhaustively examined for solutions, which should be done as early as possible in the life cycle.

This approach is often referred to as a fail fast strategy, so that only the most promising ideas move forward. Organizations also learn from failure. Fast, frequent, frugal failure decreases the learning cycle time and allows organizations to come up with better ideas faster in the future.

Enterprises should treat innovation as an end-to-end process from idea to value creation, and each problem faced in this process as an opportunity to invent a solution that moves the process forward. In many cases, the problem/invention challenge identifies and clarifies the real opportunities for sustainable competitive advantage.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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