doing innovation

By Gerard H. (Gus) GaynorRetired 3M Director of Engineering

President, IEEE Technology Management Council

IEEE-USA E-Books

Book 1Perspectives on Innovation Book 2 Developing a Workable

Innovation Process

Book 3Fostering an Innovation Culture

Book 4What It Takes To Be an Innovator

Doing Innovation: Creating Economic Value

Published by IEEE-USA

Copyright © 2009 by the IEEE. All rights reserved. Printed in the United States of America

Edited by Georgia C. Stelluto, IEEE-USA Publishing Manager

Cover design and layout by Josie Thompson, Thompson Design

This IEEE-USA publication is made possible through funding provided by a special dues assessment of IEEE members residing in the United States.

Copying this material in any form is not permitted without prior written approval from the IEEE.

3Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Status of Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Innovation Process Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Summary of Process Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Working Toward an Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Innovating by Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Generic Innovation Process Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Idea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Invention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Pre-Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Market Launch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Measuring Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

DoInG InnoVATIon: CrEATInG EConomIC VAlUE — Book 2. DEVEloPInG A WorkABlE InnoVATIon ProCESS

4 Introduction

Book 1, Perspectives on Innovation, included a brief history of innovation; a discussion about the scope of innovation focusing on the fact that innovation is not limited to

technology-related functions, but is an enterprise-wide activity; and that information from many organizational functions and disciplines drives the innovation process. The process involves the management of a continuum from raw idea to design concept to invention to innovation that must satisfy specific requirements. And finally, innovation was defined as — very simply —

Innovation = Invention + Commercialization or Implementation

no commercialization or implementation, no innovation. Innovation should not be confused with research and development (R&D). R&D develops the information; the innovation process brings the product to market.

Book II of this four-book series focuses on the innovation process. Research about the process by which innovations occur has not provided any significant insight that allows replication. Most information is anecdotal, and that may be because the elements that drive innovation cannot be described by some linear process. There really are no algorithms that define the process. There are no models that can be applied across multiple industries. Those stage-gate processes that define termination, although based on rational decisions, can easily decimate potential innovations. There is no theory of innovation to guide the process. Perhaps the limiting factor involves the fact that innovation is a people-centered activity that depends on creativity, breadth of knowledge, and a passion to take an idea and transform it into a successful product or service.

Book II of this four-book series:

• Teaches the fundamentals related to the innovation process

• Presents various models with their limitations

• Describes the innovation design process

• Considers the issues in developing a process model

• Suggests a generic model

• Describes organizing for innovation


5

Book 2 Perspectives on Innovation

Status of Innovation

From the McKinsey Quarterly1, “Executives say innovation is very important, but their companies’ approach to it is often informal, and leaders lack confidence in their innovation

decisions. Top managers and other professionals agree that the biggest challenge is talent but disagrees on why. Nevertheless, executives agree on some steps to improve innovation.”

The report provides some interesting conclusions. Here are a few that relate to our discussion of the innovation process:

1. While innovation is essential, getting it right is as difficult as ever.

2. Seventy percent of executives see innovation as the growth driver.

3. A majority of executives say they decide where to focus the innovation effort — 40 percent depend on a fact base, 37 percent on peer consensus, and 21 percent on intuition.

4. Little emphasis is placed on breakthrough innovation, focusing primarily on product or service development.

5. While a third of senior executives say that innovation is part of the leadership function, an equal number state that their organizations govern innovation in an ad hoc manner.

6. Talent and culture are the most important drivers of innovation.

This McKinsey report is very disheartening. Executives and managers have been talking about innovation for at least the past two decades. Now, in the midst of the current economic downturn, a chorus from academia, government and industry is beating the drums for more innovation. The question is, do these people understand what innovation involves, and what it takes to come through with a breakthrough. If not a breakthrough, is there at least a new- to-the-market product or service that in some way enhances economic or social progress?


6 Innovation Process models

Innovation process models must be discussed in the context of the innovations scope and purpose. In Book I, we described four basic categories:

• Incremental innovations — dominate the innovation scene — sometimes referred to as evolutionary — the continual updating of digital printers

• New-to-the-marker innovations — combine discontinuous, radical and disruptive innovations into a single category, since they involve something that’s new-to-the- market — the original 3M Post it Note with subsequent enhancements that transitioned to incremental

• System innovations — innovations that cross disciplines, involve massive investments and generally impact society — the Denver airport’s automatic baggage control system

• Breakthrough innovations — are what the name implies, something that changes the game — Sony’s Walkman was a breakthrough — thereafter it became incremental

Academic researchers, like Roberts and Frohman, Van de Ven, Cooper and Quinn have provided innovation process models. These models tend to look at innovation as being directed from the top-down, rather than from the bottom-up of the organization. Open Innovation5, officially referred to as Distributed Cocreation, represents a newer model for the innovation process.

Roberts and Frohman2, while acknowledging that innovation does not occur through some linear process; nevertheless suggest that technological innovation involves:

• Identifying an opportunity

• Developing the idea or ideas

• Solving the associated problems

• Developing prototypes

• Commercializing the opportunity

This approach assumes that innovation is a purely rational process. Based on our description that Innovation = Invention + Commercialization or Implementation, we may question whether this process involves innovation. This model implies that innovation is driven from the top of the organization.


7

InnoVATIon ProCESS moDElS

Van de Ven3 and his colleagues propose a model derived from the findings of the Minnesota Innovation Research Program: it goes into considerable depth and is based on seventeen years of research. The study essentially verified the assumptions and anecdotal evidence about innovation and innovators that:

• Innovation is a repetition of divergent and convergent thinking

• Outcomes were often precursors to other ideas

• The organizational structure involved a group of loosely bound practitioners who focused on some specific conclusion

• Innovation involved high levels of ambiguity and unpredictability

The Van de Ven model includes:

1. Initiation — a gestation period that may involves years to formulate into a workable concept — the thinking stage — learning today and discarding tomorrow — may involve that magic moment, but after much reflection

2. Development — this phase looks more like project management than innovation — considers changing criteria and requirements based on new knowledge — introduction of additional professionals with specific competencies — justification of additional funding because of new knowledge (major innovations may require years; thus, market conditions will change, and such changes will need to be addressed)

3. Implementation/termination — like any activity implementation involves the complete organization and significant resources — integrating the resources and organizational infrastructure and allocating them eventually determines the level of success

Van de Ven does call into question the often commonly held beliefs that innovation proceeds by following an orderly periodic methodology, that innovative behavior is unpredictable, or that innovation occurs in a predictable manner.

Cooper4 introduced the stage-gate system for moving product innovation to the marketplace more rapidly that included a series of stages and definitive decision points. The Cooper model includes:

1. Identification — begins with identifying a particular problem or opportunity

2. Ideation — focuses on a collection of ideas to solve the problem or pursue the opportunity

3. Conceptualization — takes in consideration issues such as technologies, markets, potential revenue stream, organization resources and infrastructure, organizational fit, and competitive factors

4. Development — includes the research, design, development, manufacturing, marketing, distribution, and marketing related to the product

5. Testing — verifies that product meets the quality and reliability standards based on user requirements

6. Launch — brings together all the resources to commercialize the product

8Keep in mind that the Cooper model uses the stage-gate approach to determine continuation of the work effort. There are certain quantified criteria that determine whether or not a project continues from one stage to another. This approach may be dangerous, if the criteria and time lines are enforced. Innovation does not occur on such a rigid schedule.

Quinn5 describes innovation as controlled chaos. He considers innovation from two perspectives:

1. Independent innovators working in the garage, or a similar location, perceive probabilities of success at a much higher level. They can live with the ambiguities and frustrations associated with the innovation process; disregard formal planning; and are willing to mortgage all their resources to meet the objective.

2. Innovators working within an organizational structure are often isolated from upper-level management; find that the culture inhibits innovation; often clash with those obsessed with rational decision-making; and must fight the naysayers who conjure up reasons to discourage, rather than encourage, through constructive questioning. Unfortunately, organizational bureaucracies continue to create roadblocks to those who support constructive change.

Both independent and corporate innovators live in this mental state of controlled chaos, as described by Quinn. If you have ever attempted to be involved in innovation, you know what is required to define an idea, and then develop the concept that can be communicated. Innovation involves a series of iterations followed by more iterations, and each iteration raises more doubts and questions. If you haven’t been involved in the innovation process, I suggest that you come up with an idea. Iterate on the idea until you develop the concept, then try to communicate it to your colleagues. Their reaction may disappoint you. On the other hand, you may be pleased and energized by their responses. After all, new concepts are sometimes difficult to accept, even by your own colleagues.

The bottom-up organizational innovators operate very much like what Quinn describes as the independent innovators. They disregard negative comments, and push on in spite of setbacks. They beg and borrow the resources to demonstrate the value of their efforts. They usually possess broad knowledge of associated disciplines.

The top-down organizational innovators gain the advantage from direct management support. Whatever concept has been proposed and discussed and convinced, management considers the proposal as fulfilling some aspect of the organization’s purpose; it relieves the innovator from searching for funding or organizational expertise. There is a downside, however, to top-down innovation; the innovator’s actions come under the watchful eyes of the senior executives.


9Open Innovation always has played a role primarily in breakthrough, or new-to-the-market, product innovation. Organizations have accepted ideas from customers, suppliers and consultants to meet objectives. The Open Innovation promoters have formalized the process. However, in an article in the McKinsey & Company Quarterly6, the authors claim open innovation is on the rise. The official name of such actions is distributed cocreation. Distributed Cocreation allows organizations to delegate more management of the innovation process to a network of independent specialists and suppliers. The authors identify challenges, such as ownership of intellectual property and increased operational risk. Distributed Cocreation, as with all models, presents management challenges. Boeing’s 787 Dreamliner may be an appropriate current example: major technical advances; a supply chain that spans the continents; and at present, a two-year delay in meeting the first delivery date. Controlling the supply chain on such major programs is time-consuming, and it requires additional resources to maintain a program on schedule.

Summary of Process Models

Roberts and Frohman acknowledge that innovation does not follow a linear process, but proceed to define the linear process. From a very broad perspective, their model may be good for those innovations that involve enhancements to current products, processes, or services.

Van de Ven proposes a model based on a seventeen-year longitudinal study, and takes into account the uncertainty stage that requires many iterations of divergent convergent thinking required to evolve an idea into a workable concept. Van de Ven follows up with a description of development and implementation.

Cooper introduced the stage-gate system for moving product innovation to the marketplace more rapidly that includes a series of stages and definitive decision points. Quantified criteria and a process determine the continuation of a project.

Quinn considers innovations from the perspective of the independent innovator and the organizational innovator. Quinn also describes innovation as controlled chaos. But the word chaos must be put in perspective: Quinn is not referring to organizational or operational chaos. The process involves a level of mental chaos where each new bit of information often requires restudying the whole issue.

Open Innovation (Cocreation), while a very interesting concept, applies more to the project management phase of a program than the innovative side. Is it possible to conceive a new form of aircraft propulsion that replaces the jet engine using five independent vendors or consultants located thousands of miles apart? Success would depend on how the value-chain is managed.

Each of these models from the academic and consulting communities loses sight of the complexities of the innovation process. They are presented as a caution to innovators and organizations that choose to take a seat on the innovation bus. Why is there so little innovation that really matters? Simply stated, you don’t develop a brainstorming session, select the idea and innovate. Innovation is not about technology only. It is not about research — it’s about bringing new products and services to the marketplace, and building effective and efficient organizations that serve society’s needs.

InnoVATIon ProCESS moDElS

10 Working Toward an Innovation

The history of xerography provides an excellent example of the struggles facing the innovator and the general reluctance of management to give due consideration to what has

not been previously attempted. Chester Carlson, a patent attorney, invented the xerographic process in 1938. A copy machine was marketed in 1948, but it took more than another decade to introduce a practical rotary-drum office copier. It took more than 20 years to go from demonstration of a principle to a market-worthy product. Could that time period have been shortened? Yes.

Xerography eventually found its home at Battelle, and subsequently, the Haloid Corporation that manufactured photographic papers, but not after it was turned down by executives at IBM, RCA, A. B. Dick, and many others. The Haloid Corporation then became Haloid-Xerox and eventually Xerox. But look how future Xerox top-management failed to implement the results of their Palo Alto Research Center, where the personal computer, the mouse, and Ethernet software were invented. Also Xerox management was slow to respond to competitors like Canon, Minolta, Ricoh and Sharp.

While innovation is central to organizational development, innovation continues to be an ad hoc function. Organizations have attempted to develop innovation centers of various types with little success. Innovation at Eastman Kodak (Kodak) was driven from the top through its research activities and its emphasis on process. There came a time when Kodak attempted to emphasize innovation by setting aside funds for promoting new ventures from the bottom-up. Kodak was attempting to implement the almost 75-year-old 3M model that focuses on bottom-up innovation. Kodak established 14 venture groups. Eventually six were shut down, three were sold, four were merged into the company, and one operated independently. One of the entrepreneurial leaders noted that researchers, engineers, and others were assigned to him by upper management. He personally had no choice in the selection. As this leader noted, “Kodak people would take their eight-hour work day and go home.” Innovation doesn’t succeed with an eight-to-five mentality.

Over its history, Kodak provided society with those many family moments. Everybody re-spected the little yellow box: it was a symbol of America’s opportunity to build an organization, provide employment to a broad spectrum of citizens, and serve society through its philanthropic support of multiple causes. In more recent years, Kodak missed several market opportunities and came in very late into the digital age, even though it developed some of the earliest digital technology. Kodak’s growth was driven from the top — it was not bottom-up innovation. It was well-managed, organizational management that functioned at a time when Kodak controlled its essentially uninhabited market.


11With its bottom-up innovation, 3M has produced an array of products that are built not only on technology platforms, but also on engineering, product development, marketing, manufactur-ing, and supporting organizational platforms. 3M’s Post-it Notes® is a typical example of the 3M innovation process. Art Fry, the inventor, sang in a church choir for many years and used those little slips of paper to identify the choices in the hymnal. But on one Sunday, he concluded that there had to be a better way. Why, on this particular Sunday? I doubt that either Art Fry or anyone else knows. Post-it Notes® is an example of bottom-up innovation. Art Fry went through the usual challenges of a 3M Innovator: define the idea; formalize some form of initial concept; learn about the problems; talk to colleagues; consider availability of 3M’s technology base; go through all the steps required to transition an idea to an innovation; in essence, live with the innovation 24/7; and demonstrate the concept. Up to this stage, the innovator borrows, begs and bootlegs (a perfectly acceptable approach at 3M, as long as it doesn’t violate its statement of ethical practices) all the resources to demonstrate viability.

As noted, innovation involves commercialization or implementation. At this time, the 3M innovator will most likely seek out a senior executive as sponsor. Keep in mind that the executive sponsor puts his or her future on the line. However, at 3M, the cost of failure can best be illustrated by a comment from Lew Lehr, 3M’s CEO7 from 1978 to 1986:

“ As befits a company that was founded on a mistake, we have continued to accept mistakes as a normal part of running a business. Every single one of my colleagues in senior management has backed a few losers along the way. It’s important to add, however, we expect our mistakes to have originality. We can afford almost any mistake once.”

It’s this kind of a mental attitude that allows senior management to take the risks in promoting that which has not been done before. You can argue that 3M’s approach may not be the most effective or efficient, and it definitely is not, but for more than 100 years, it has provided 3M with a stream of new products. The original business principles stated that a current year’s income had to come from those products that were not available in the previous five years. That requirement is a challenge for any organization. Continuous renewal!

Emphasis is often placed on technological innovation, as though technology alone would be sufficient. Invention is only one part of the innovation equation. Therefore, is what comes out of a research laboratory not innovation, but invention?

To speak of innovation as including a design, may appear to some as an oxymoron. But while that magic moment when someone comes up with the idea cannot be planned — what happens after the idea has been identified? While not subject to any formal planning system, it can be facilitated by considering the potential innovation using the principles of design.

WorkInG ToWArD An InnoVATIon

12 Innovating By Design

Based on the results from the McKinsey survey, you may conclude that expecting some formal process for innovation is beyond our capabilities. Not so. The problem is that

innovation is generally ad hoc, because organizations fail to recognize that innovation requires a focus, a design, and development of an environment where innovation and innovators can flour-ish. Too many executives, managers and technology professionals continue to look for those Eureka’s that seldom occur. They fail to understand how long it takes to bring an idea to the marketplace, and what it takes to support a breakthrough innovation. Over the years, many in management and their colleagues in the profession have lost contact with operations, and with the impact of the thousands of decisions made at lower levels in the organization.

So, what is involved if an organization attempts to operate with a design innovation model (DI)? Even in the best of companies, the level of innovation may be problematical. DI does not follow the well-planned processes associated with project management. If it could, the road to successful innovation would be much easier, and certainly more fruitful. However, the purpose of DI is to shorten the cycle-time from original idea to implementation; actions can be taken to facilitate and guide the innovator and the organization through the process, remove the negative impact of the organizational bureaucracy, and shorten the time to commercialization or implementation. That guidance, however, must mitigate the impact of naysayers and obstructionists to any new idea that surfaces. We are all aware of the proponents of the “if it isn’t broke, why fix it” approach to managing. Unfortunately, many organizations have lost their status in their community of interest, because they should have anticipated the potential problems on the horizon.

Innovation is a people issue, and not too many organizations or individuals are willing to take on the mantle of the innovator. Innovators think differently. They’re constructive mavericks. They defy the status quo. They’re uncomfortable without change. They may come from any part of the organization. They are masters of a particular discipline, but have a workable knowledge of many others.


13DI considers innovation from a holistic perspective. Innovation = Invention + Commercializa-tion or Implementation and the output of R&D is not innovation. Invention is not science: it takes known’s and puts them into a new configuration. Invention begins with an idea that will be configured in many different was before it is understood and can be communicated in such a way as to make sense. It may require prototyping. It may require additional research, either to understand or modify. Commercialization involves manufacturing, marketing and sales, distribution, and all the support functions of the organization. These commercialization activities are brought into the picture in the early stages of the innovation process. Questions will be asked, such as:

1. What are the possible knockouts?

2. What are the market opportunities?

3. What are the legal, environmental, and safety issues?

4. Who is the targeted customer?

5. Who are the users?

6. What kind of product: new-to-the-market, a me-too product, a commodity

7. What is the value of the intellectual property?

8. Will the organization’s resources and infrastructure support the innovation?

9. What delays will be created if R&D is required?

10. Are the required technologies available within the organization? If not, what are the difficulties in accessing those technologies? What are the eventual cost implications?

11. Will management support the innovation?

12. Are the required competencies available?

13. Does the product/service fit the organization’s strategic directions?

14. Does the potential innovation’s scope meet the requirements?

15. Will the organization accept the level of risk?

16. Is “time to market” a factor in the investment?

InnoVATInG By DESIGn

14By asking these questions and many others, in the earlier stages of the innovation process, organizations can reach decisions on the level of investment more quickly. These questions must be asked at an appropriate time in the process and are a judgment call, so timing is important. A viable proposal could be thrashed before it was even presented; marketing might say “it won’t sell” and kill the effort immediately. Manufacturing could emphasize the need for excessive capital investment. Someone might suggest “it’s out of our league.” If you ever tried to introduce something that is substantially different from current practice you are aware of the difficulties. So DI attempts to speed the process by asking some of the tough questions early in the process and continues to ask them throughout the birth of the idea to implementation. The DI model is shown in Figure 1.


IDEA

CONCEPT

INVENTION

INNOVATION

PRE-PROJECT

PROJECT

MARKET

(1) (2)

(3)

(a) (b)

(c) (d)

(4)

(5) (6)

(7) (8)

(9) (10)

(11) (12)

Figure 1 Idea to Market Process

15Generic Innovation Process model

The innovation process involves a series of events that continually change from the suggestion of an idea. The process includes the following stages as shown in Figure 1

that includes:

1. Idea

2. Concept

3. Invention

4. Innovation

5. Pre -Project

6. Project

7. Market

Each of these stages involves a series of primary and secondary feedback loops that take raw information and try to make sense of the implications of the available information. As an example, the development of an idea that has meaning involves a series of iterations, either mentally, or in written form before the idea even makes sense to the originator of the idea. Figure 1 includes seven stages. Single loop feedback occurs between idea and concept, concept and invention, invention and innovation, innovation and pre-project, pre-project and project, and project and market. There are also secondary feedback lops between idea and invention and invention and pre-project. Idea to concept to invention is a continuum and in most cases this stage we refer to as invention fails for any number of reasons and its necessary to trace back to the idea and the concept. A similar situation exists between invention and pre-project. The pre-project stage is included, because it is essentially a development stage that will require several rounds of funding. The model also calls attention to the fact that the innovation cycle includes everything that’s required from idea to the marketplace.

GEnErIC InnoVATIon ProCESS moDEl

16 Idea

Generating new ideas is probably one of the most difficult tasks to be performed by any human being. If you doubt that statement, I suggest that at some appropriate time you

go through the exercise. See how long it takes to generate an idea that can be communicated to your colleagues and receive consideration. The research on how and why ideas occur at a particular time does not shed much light on just what has to be done to generate plausible and workable ideas. I used the word plausible and workable, because ideas need to be developed than can be pursued within a particular organizational context. An auto manufacturer would most likely not be interested in pursuing the same ideas as a manufacturer of cereals — Ford as compared to Intel; 3M as compared to Boeing. A word about ideas: Ideas are of little value, unless the idea generator or someone else decides that the idea is worth pursuing and pursues it. According to Theodore Levitt.8

“ The trouble with much creativity is that many of the people with the ideas have the peculiar notion that their jobs are finished when they suggest them; that it is up to somebody else to work out the dirty details, and then implement the proposals. Typically, the more creative the man, the less responsibility he takes for action.”

While Levitt’s statement is generally true (some people fashion themselves as idea generators), managers have a responsibility to listen to those ideas and find those gems that need to be explored.

Why it is that some people can see only the trees or the forest, while others see not only the trees but also the forest? Some see the pieces; others see the pieces and the whole. That’s the big unknown question that hinders creativity and innovation. We only know when we see a physical manifestation. We do know that there must be a gestation period, where one becomes somewhat passionately involved in pursuing a solution to some problem, or taking advantage of an opportunity. Coming up with an idea usually involves an action. Someone has concluded at some point in time that solving a problem or taking advantage of an opportunity might not only present a mental challenge but meet some market or social need.

Creative thinking is not usually pursued in a vacuum. Something has to be troubling the individ-ual before any action begins: those ideas usually arise when someone observes some kind of a disconnect. Something doesn’t’ seem quite right, and ask what can we do about it? Someone must be dissatisfied sufficiently about something and willing to do something about it.

The two words problem and opportunity can carry the same or different meanings. Resolving a problem usually creates an opportunity. When Chester Carlson decided that there had to be a better way of making multiple copies besides using carbon paper, or the gelatin tray duplicator method, or retyping the documents, he was solving a problem and also looking at a business opportunity. At the present time, the United States is wrestling with the problem of providing health care through a more effective and efficient process. The means being used to accom-plish the desired ends are somewhat problematical. The problem, or more appropriately, the many problems to be solved are not described sufficiently to develop a rational solution. Solving


17the problem will present opportunities across many disciplines not only in the science of medicine, but in the way the medical practitioners practice the profession. While they begin with broad statements, business and social opportunities must eventually become subject to specific actions.

Organizations also find many opportunities to enhance operational performance. Boeing consid-ered offering its 787 Dreamliner to the marketplace, as a means of enhancing its business per-formance. This effort involves countless technology related solutions — production solutions, procurement solutions — and many other solutions from all of the organization’s functions, to take advantage of the business opportunity. The Dreamliner is, without doubt, not only a major technical challenge, but a management challenge. Asutek of Taiwan saw an opportunity by in-troducing the Asus Eee PC as a small laptop that became the Netbook and is now appearing in many versions by the traditional computer makers like HP, MAC, Acer, Dell, and Sony. However, the Asutek limited capability Netbook is now becoming a powerful Netbook with all the bells and whistles.

But what does it take to configure an idea? Unfortunately or perhaps fortunately, one idea begets another idea, and another, and so on. And while romancing an idea to gain some insight as to its possibilities is a requirement, it can also lead down a perilous path. Keep in mind eventually the idea must be sold to those who are responsible for providing the resources. Support for an idea comes only after it can be clearly articulated.

As I look back at my own experiences, and those of my work related colleagues, whether in the technical or management areas, seldom was the final configuration of an idea like the original idea; at times, there was not even a similarity. This might be expected, since that original idea was a raw idea and most likely was not given sufficient thought to consider the impact of the many conflicting parameters — conflicting parameters that were not only never analyzed, but never considered. Those revelations come from serious thinking about the idea.

Most organizations pay close attention to some form of an IDEA BOX. Those ideas placed usu-ally lack thoughtful detail. Ideas are like raw materials: they need a lot of work and resources to make them usable and viable for implementation. Conceiving and formalizing an idea, so it can be analyzed for its potential benefit to the organization, requires a thoughtful process that must follow some logical line of reasoning. IDEA BOX submissions seldom provide enough informa-tion to determine if any effort should be dedicated to pursuing them; they require more thought and analysis before any formal work can be done. These raw idea are just what they are, raw ideas. These ideas now need to be worked and reworked until they provide some content and context. What is this idea all about? What are the essential elements of the idea? Most likely the idea requires time for gathering information to determine its viability. I’ve had many engineers and managers approach me with an idea. I always listened and then asked them to take the time and write it up. Write it down, and then get back to me, was my usual response. Most never returned, not because they were necessarily negligent in any way, but because after they thought about the idea, they may have found that others were already implementing it, and more questions arose as they studied the issue. That’s the process: every new piece of information adds additional questions that require an answer. Ideas must be written down to be tested. Writing an idea down somehow forces people to look at the idea from different per-spectives. Art Fry, inventor of 3M’s Post-it Notes, did not start to invent Post-it Notes. He began in search of a means to mark locations in his hymnal. I can’t say for sure if Art Fry committed

IDEA

18his thoughts in writing, but if he followed 3M’s policies on recording experiments, he not only wrote them, he had them witnessed.

Not everyone has the competence to independently generate new ideas. It requires more than knowledge: it requires some of those undefined qualities like knowledge, experience, personal initiative, broad interests and confidence in exploring new directions, ability to deal with rejection and failure, and a sense of seeking the unknown.

Here is an interesting example. At one time, I hired a very competent engineer with about 10 years of experience. His record included a list of project successes that included not only technical achievements, but also demonstrated a business perspective. After several months, he walked into my office, and said he didn’t feel he was doing his best for me, because he lacked the freedom to use his initiative. He was looking to work on issues that he presented, rather than on the assigned projects, even though they were challenging. We had a pleasant interchange of ideas, where I attempted to understand his situation — because I felt he had some very challenging assignments and was meeting expectations. I finally asked him what he thought if I gave his project load to other engineers, and allowed him to do whatever he wished for the next 90 days or so, no real time limit: the time period could be extended beyond the 90 days, if agreeable to both of us. In less than 30 days, he was back in my office asking for an assignment.

Solving an assigned problem provides a guide as to what is expected: if adequately described, there should be no doubt about the expectations. Solving an assigned problem requires knowledge, an adequate level of experience, the necessary skills sets like communication, and the ability to work individually and in groups. Identifying the problem and developing a solution, the problem finders, require that extra set of skills: imagination, interest, initiative, insight, observation, and a breadth of vision with the ability to live with uncertainties and resolve conflicts. They define the problem by exploring the “sand boxes” that their colleagues in other disciplines inhabit and where the posted “no entry” sign is simply disregarded.

The bottom-up innovators will most likely accomplish this idea stage with their own bootlegged resources, plus the assistance from colleagues who may provide the necessary discipline information. At this Idea Stage, in an organization that operates with top-down principles, there would be little different from that of the bottom-up proposer.

IDEA

19


Concept

What does it take to transform an idea to a concept? That process is more complicated than one might imagine. Figure 2 shows the elements involved in that process.

Assuming that a new idea is generated, it is based on Input 1 and Input 2. Input 1 involves the known, the controllable, and the predictable. Input 2 involves the unknown, uncontrollable and unpredictable. The objective is to reconcile the Input 2 parameters based on the available information, which could be somewhat limited at this stage. Of course, this is the work of the Idea to Concept Stage: gather sufficient information to determine the viability of the idea, redefine the idea, and work toward finalizing the first description of the concept. The number of times that it may be necessary to go around this feedback loop depends on the scope of the idea. It may require (n) times, and then it may be possible to discard the idea.

INPUT 2

UNKONWNUNCONTROLLEDUNPREDICTABLE

IDEA

DECISION

COMPARATORREQUIREMENTS

INPUT 1

KNOWNCONTRALLABLEPREDICTABLE

CONCEPT

Figure 2 Transition from idea to concept

20 The purpose of the Concept Stage is to consider the issues that provide some guidance for continuing the effort: it involves acquiring new information, evaluating old information, and then raising questions and issues toward reaching a conclusion as to the value of the idea to the organization. The process includes:

1. Strategy — Identifying how the concept fits within the strategic directions of the organization

2. Capabilities — Investigating the concept in relation to the competencies and capabilities of the organization

3. Resources and infrastructure — Understanding the limitations of the organizational resources and operating infrastructure

4. Knockouts — Identifying potential knockouts: those issues that would doom the program

5. Technologies — does the idea fit within the organization’s competence in the core, supporting, and current emerging technologies, if not, can they be acquired from external sources

6. Product distribution — does the current sales organization for moving the potential product or service to the global marketplace meet the requirements, or will a new distribution system be required

7. Physical distribution — does the physical distribution system from order entry to receipt by the customer meet the requirements

8. Marketing — do marketing and the technology related functions integrate their efforts for maximum effectiveness

9. Customer service — will the pre- and post-customer service group be qualified to meet the needs of the new product or service

10. Competencies in all related disciplines — are the many different discipline and competency levels available to bring the product or service to the marketplace successfully

11. Funding — whether the project begins from the bottom-up or the top-down, funding will always be an issue, regardless of the economy — this is something new and the risks and uncertainties abound

12. Socializing — socializing the idea will be a continuous process, because success will depend on bringing many different organizational departments together to gain approval when the idea reaches that stage

13. Identifying the deliverables — describing the deliverables at each stage provides a means of tracking progress

14. Documenting the work effort — the scientific community takes great pains to docu-ment experiments for patent and legal purposes — the engineering community often fails to adequately document its findings — documentation is essential for successful innovation


21You may ask why we are discussing these 14 issues so early in the game. First, remember that finding this information does not require research; these are questions that can be answered quickly to eliminate future unanticipated consequences. The organization’s technology base often receives no consideration until the project stage. The sales department may not meet the requirements for selling the new product or service — different products require different sales skills. Innovators and their organizations often disregard the costs associated with establishing a new physical distribution system. People are assigned without the required knowledge and begin a training period at the start of a project that creates delays. Introducing a new customer service arm for a product that deviates from the organization’s norm may incur additional expense. Discipline competencies determine success or failure in promoting a concept. This doesn’t mean that anyone of these ten requirements should scuttle the idea, but recognize in the very early stages that innovation is market oriented, and eventually any one of these 14 requirements could scuttle the project. Being sensitive to these issues in the early stages provides a better understanding of future requirements.

Assuming that an idea has been articulated, the Concept Phase requires developing the preliminary design of what will be involved in exploring and implementing the idea. The Concept Phase identifies whatever is required prove the viability of the idea, not only in relation to the technology-related issues, but with all internal and external organizational functions that are involved in bringing the product or service to the marketplace. If the idea relates to a process or to an internal organizational problem all related functions must be involved.

Transitioning an idea to a concept primarily involves information. Initially, the Concept Stage involves brain work — thinking and thinking time, but thinking toward identifying the issues. What information is required to implement the idea? The process begins with identifying the known, the predictable, and the controllable — and the unknown, unpredictable, and uncontrollable factors involved in implementing the idea. The required information will be acquired over some time period, and as new information is gathered, old information may be discarded or reevaluated. This information gathering is what creates the chaos, as described by Quinn. What’s true today may not be true tomorrow, but may be true at some future date; unfortunately, that is the process.

Can you think idea, concept, invention, and innovation at one time? Can you think about tech-nology, marketing, customer needs and wants, product distribution systems, organizational purpose and strategies at the same time? That’s what the innovation process involves.

How many times will you go through this process? Probably many times with various levels of frustration, taking two steps forward and one step back, and sometimes two steps forward and then starting from a zero base.

ConCEPT

22 Invention

This process does not apply to complex systems, such as NASA Programs (as an example, landing man on the moon and returning him back to earth), weapons systems, communica-

tion networks, major infrastructure projects, new aircraft designs, and programs that are often referred to as System of Systems or Arrays. Projects of this type are in a class by themselves, since they are based more on very high-level multi-disciplinary research and project manage-ment principles.

What do I mean by invention? Jacob Schmookler,9 in Managing Advancing Technology, defined invention as: “Every invention is (a) a new combination of (b) pre-existing knowledge which (c) satisfies some want.” I have found the Schmookler description one that embodies much of what has been written on the subject. So, invention is something new that has not been done before. It may or may not involve patents. It may be held as company confidential, if the value is placed on the process by which the invention is achieved. Invention involves reduction to practice and proof of principles. It involves doing whatever is required to reduce the concept to practice: that could include concept testing, recommending studies on specific requirements, setting up various experiments, prototyping certain questionable parts or assemblies to demonstrate workability, identifying potential problems, using pilot plant operations, and demonstrating the concept to determine future actions. The deliverable will be a physical or mathematical model, a mockup to demonstrate the principles involved, a software program, a paper that identifies a product or service that cannot be modeled in any way, or whatever means is required to clearly identify the invention. Is it a gadget of some kind, a new electronic toy, a new concept of a diesel engine, a copying system that obsoletes xerography, a new process that is not only more efficient but adds value because of improved quality? And the list goes on.

The difficulties in developing the Concept to Invention stage will depend on the scope of the work. The effort will be quite different for a product, such as a Netbook, compared to further miniaturization of a microchip. The current emphasis on developing some practical version of an electrically driven automobile would require not only the invention of the automobile, but also an invention of some form of chargeable battery that can meet a specified set of specifica-tions. We know that a single charge battery will have to provide something in excess of 100 miles before requiring a recharge to meet minimum requirements. The battery is the critical assembly, yet various groups are taking on the design of the total automobile, which in the final analysis will be a rather routine design activity. Based on current knowledge of even the best approach, it may be prudent to gain agreement on the minimum number of miles required to make the electric car a viable vehicle. The design of the car should not be a major challenge; the challenge is the power source.


23Innovation

Most incremental innovation, whether a product, service, or process improvement, even though bottom-up, will garner some level of support from the immediate management.

Innovation related to a new-to-the-market product presents complications because of the inputs required from many organizational units with their own priorities. So, our discussion of the In-novation Stage will focus on the requirements for a new-to-the-market product. An invention has been described. Where do we go from here? What is involved in this innovation stage? Innovation is all about commercialization or implementation. So, this stage begins to look at the invention from a business perspective. Does this innovation involve a new business, expand a current business or line of products, or obsolete existing products? What are the benefits to the organization? Does it provide a competitive edge, or is it just catching up with the competition?

This stage requires more than the innovator, if it to be successful. While the work thus far may have been done by one person, with the help of colleagues and without any official funding, it is now necessary to provide some official funding. This is the time to look seriously at whether or not there is a potential business. But finding the funding will depend largely on the innovator. Innovators usually have a business sense that borders on the entrepreneurial: They have no fear of putting on the sales hat. This is also a time when the innovator should be looking for a sponsor at the upper management level: That person could be the immediate designated man-ager. It could also be someone at more senior management level. The fact remains, finding the funding will be essential to continue. Up until this time, resources may have been bootlegged, peers and others may have provided information and advice without charge because of their interest, and the passion of the innovator was sufficient to make progress.

This is the beginning of the Innovation Stage. The Innovation Stage now involves a complete review of the:

1. Strategy

2. Capabilities

3. Resources and infrastructure

4. Knockouts

5. Technologies

6. Product distribution

7. Physical distribution

8. Marketing

9. Customer service

10. Competencies in all related disciplines

11. Funding

12. Socializing

13. Deliverables

14. Documentation


24The deliverables at the end of this stage:

1. Describe the strategic fit with the organization’s purpose and objectives

2. Illustrate in an appropriate manner the idea, concept and invention

3. Show how the innovation promotes the organization’s purpose and objectives; benefits the organization, if successful; inhibits organizational performance, if not approved; and reasons why management should support the effort. Since projects will differ in scope, purpose and markets — just answer the simple question: Why should the organization invest in this project?

4. Describe the features, advantages, and benefits to the user

5. Estimate potential market opportunities – who are the customers?

6. Describe the operational impact on related departments such as R&D, manufacturing, marketing, and distribution

7. Provide justification for investing the organization’s resources

8. Describe any valuable intellectual property, such as patents and copyrights

9. Estimate future financial requirements, assuming project success

10. Develop a simple sales pitch

The intent is to perform a review to determine if the original assumptions are correct, and if not, identify those that might pose potential problems. Providing the deliverables involves more than providing the paper work for the Pre-Project Stage. The Innovation Stage will include a great deal of work to demonstrate feasibility. This may include extensive work in prototyping, in research, in process, in procurement, and in all the factors related to the product in question. A demonstration of some type will be required — not a final design, but a demonstration of the principles.

InnoVATIon

25Pre-Project

It’s time to determine if some upper level of management is willing to support the innovation financially. The opportunity to propose the project to upper-level managers for some initial

consideration offers the innovator access to gaining insight from the manager’s perspective, and possibly finding the initial supporter: the one who will take the time to become involved and help smooth the way for eventual presentation to some executive level. This initial involvement may not be financial but supportive in terms of how to make it happen. Bottom-up innovators eventually needs top management support. If management approves some initial funding the innovator is well on his way. If management disapproves the initial funding, the innovator has two choices: (1) discontinue the effort; or (2) continue the effort with the new knowledge gained from the discussion with management. Innovators do not usually take “no” for an answer, and then capitulate. It’s their idea, and they will pursue it, even if they have been told by management to stop. They will continue with practical bootlegging of knowledge and resources (all ethical and legitimate) to promote their idea. That’s the life of the bottom-up innovator.

There are times when management may not approve but may ask for more information. This should not involve any difficulties. The point is to capitalize on the discussion that took place with upper management. The innovator now has an entry, someone they can contact for advice and guidance. In my career, when my contact with the Board or Operating Committee was required to gain approval of a project, I would mostly do what I called a pre-sell with certain members — not only to inform them, but also to gain their insight before I made my formal presentation to the group. This gave them an opportunity to ask all their questions before the meeting, and build support for the project. This approach also gave me an opportunity to uncover issues that I may have somehow disregarded. In the final analysis, the future approver gained greater insight, and I gained insight about what types of questions the other approvers might ask. Innovators and professional specialists do not view issues in the same mirror that confronts upper-level or executive management. Innovators, their immediate managers and executive management need to recognize that this first request for funding will not be the last. An astute management will realize that the first funding is only a down payment.


26While the Innovation Stage may be led by the innovator, the organization now has a stake in the project. This is no longer a personal activity with the support of interested colleagues. If executive management was serious in approving first-level funding, someone will be asking: Is the innovator the correct person to lead this project, as it goes forward? Other functional groups, such as marketing, sales, engineering and manufacturing will be brought into the loop, and play a much larger role than the self-appointed colleagues of the past who advised and supported the innovator. Other groups involved in safety, the environment, legal and government regulations may also be involved in the project. Blending these organizational units into a team capable of fulfilling the intent of the innovation, and at the same time making the innovator a part of that team raises many problems. The innovator is required absolutely, the new team members will most likely come in with their own ideas, and differences must be reconciled. Over the long-term of the project it will be necessary, in most cases to appoint a project manager who understands business project management, and at the same time keep the innovator motivated to work with the group. It’s essential that the innovator be part of the team.

The Pre-Project Stage sets in motion the process of developing a business plan and a project plan. The process involves consideration of everything that has been learned thus far, adding new information regarding technology and market viability, and designing and building whatever prototypes are required to demonstrate feasibility. At the conclusion of this stage, there should be no doubt about what is to be accomplished, and what this new-to-the-market product will accomplish for the organization.


27The Pre-Project Stage focuses on issues such as:

1. Assigning people resources — is the talent available and where

2. Evaluating the viability of the organization’s infrastructure — does the organization’s mindset regarding innovation support the project

3. Developing a project team that focuses attention on both the business and the implementation — the objective now drifts to the business side

4. Resolving and unknown technological issues — have all the knockouts been identified and resolved

5. Finalizing the product design requirements — user requirements need to be rationalized

6. Validating the user benefits — are user benefits clearly identified and verified

7. Identifying, defining, evaluating and justifying the investment — in the final analysis, regardless of how exciting the innovation, it must be justified financially

8. Developing the project plan — project success depends on studying the project management requirements, defining the workload, preparing a work breakdown analysis and structure, defining the schedule, identifying people who have the specific competencies to guarantee the project’s success— this is not the time to begin training

9. Developing the review process — too often, the project review process is disregarded — it needs to be defined — it requires bringing problems to the table and not hiding them — it requires developing trust, so the bad news can come to the forefront and not kill the messenger

10. Installing a communication plan — too few projects of any kind put the effort in developing a communication plan— what information must go to whom and when — this cannot be an ad hoc activity, the communication plan must be defined in such a way as to engage all the participants

DoInG InnoVATIon: CrEATInG EConomIC VAlUE — Book 2. DEVEloPInG A WorkABlE InnoVATIon ProCESS PrE-ProjECT

28 Project

The output of the Pre-Project Stage sets the ground rules for the Project Stage. This project stage requires little explanation: just follow fundamental project management principles.

The proposed business plan and the project plan have been approved, and it’s time to implement what has been approved. The team assigned to the project should have its success criteria in mind and focus on them. They need to avoid scope creep into the project. They need to lay issues on the table in a timely manner. They need to face reality. They need to realize that if the agreed upon deadlines are not met, the accepted financial justification to authorize the project will lose its validity. The innovation process ended in the Pre-Project Stage, and now is the time to manage the project to a successful conclusion using accepted project management principles. It’s time to be pragmatic. This is not the time to begin reinventing.

Those who want to continue inventing should find other appropriate activities. Obviously, issues and even major problems may be encountered, but eliminating them requires thinking ahead of the curve. This can be accomplished by asking a simple question: What has changed since yesterday? The Project Stage requires a manager who can put-it-all-together, and who possesses excellent competencies in communication, leadership and people skills. This is a management position, and while technical knowledge is essential, management competence takes precedence. This stage requires that all participants put on their business hats, subordinate their marketing and technology hats, and recognize the interdependencies required to complete a project that meets or surpasses the agreed upon goals.


29market launch

While market launch is the last stage, it certainly is not the least important. An argument could be made that once the product has been designed, marketing and sales take

on primary importance. Technical specialists may find this argument difficult to comprehend. Nevertheless, these are the people who ultimately determine success or failure. For practical purposes, not meeting targets is equivalent to failure. Product launch involves:

1. Estimating what it takes to launch a new product – this effort begins long before the product comes off the production line

2. Launching the product according to an agreed-upon plan that spells out the require-ments from the project team and with the necessary sales advertising and promotions to gain initial visibility

3. Moving the product from the factory floor to the customer’s users that meets the operational requirements, is delivered on time, and at agreed-upon costs, and with the required quality and reliability

4. Providing timely customer service pre- and post-delivery

5. Managing customer returns and resolving product problems in a timely manner

6. Making the necessary product modifications to meet offshore requirements

7. Developing


30 measuring Success

If an innovation was based on a financial return, there is no difficulty in measuring success. An innovation that provides some social benefit may be more difficult to measure because

of the added complexity and the somewhat soft parameters. There is no one-right way to measure financial success, as it will depend on the industry, timing and general economic conditions. Missing the market launch date will result in reduced income, assuming the date was critical. Advancing the launch date may or may not increase income, depending on any supporting requirements. Measuring success of an innovation usually involves more than one measure and depends on organization policies. Some possible measures include:

1. Net return to the organization

2. Payback period — simple measure of how much was invested, how many years did it take to recoup the investment

3. Market share — domestic, foreign, by country, and as required

4. Sales and profits relative to similar products

5. Actual sales and profit versus projected sales and profit at time of project approval

6. Identified spin-off projects

7. Use of existing production and operations facilities that reduced new capital investment

8. Use of current product platforms, marketing and sales organizations, distribution systems

9. Advances in technology


31references

1. McKinsey Quarterly, “How Companies Approach Innovation: A McKinsey Global Survey,” October 2007

2. E. B. Roberts and A. L. Frohman, “Strategies for Improving Research Utilization,” Technology Review, March-April 1997, pp. 33-36.

3 Arthur H. Van de Ven, et al., The innovation Journey, (New York: Oxford University Press), pp.21-66.

4. Robert G. Cooper, Winning at New Products: Accelerating the Process from Idea to Launch (Reading, Mass.: Addison Wesley, 1993) 109-120.

5. James Bryan Quinn, “Managing Innovation: Controlled Chaos,” Harvard Business Review, May-June 1995, pp. 73-84.

6. McKinsey Quarterly, “The Next Step in Open Innovation,” June 2008.

7. Lou Lehr, Dinner speech at the Wharton Entrepreneurial Center, University of Pennsylvania, 1979.

8. Theodore Levitt, The Marketing Mode (New York: McGraw-Hill, 19690, pp. 155-170.

9. Donald G. Marquis, Managing Advancing Technology, Vol. I, pp. 35-48, American Management Association, 1972., Readings in the Management of Technology, Michael L. Tushman and William M. Moore Ballinger Publishing Company, Cambridge, MA,


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