You might be under the impression that innovation starts with an idea. Right? However, in a disciplined innovation framework, the ideas stage typically happens in the middle of the process.
The driver of innovation is to create business value, the value itself can take many different forms, from incremental improvements to existing products, the creation of breakthroughs such as entirely new products and cost reductions, services, efficiency improvements, new ventures, new business models and countless other forms.
In every form, the process of creating innovation largely remains the same. First comes the discovery stage, followed by the creation stage, idea development and refining of ideas follow this. Finally, these ideas are used to improve efficiency, reduce overheads or/and increase sales.
The innovation process can be thought of like a funnel – a large number of ideas pour into the funnel, and only a few completed innovations come out of the narrow end. The catch behind creating a well-made innovation process is knowing what happens to ideas within the funnel.
But, before you start thinking up of ideas to fill up the funnel, wait.
Do understand that ideas are the seeds of innovation. They can be thought of as the wheat fields that help provide materials for making finished bread. But before the finished bread, one has to prepare fields, grow wheat and process the wheat. Similarly, with innovation, we should never start by thinking of ideas. Innovation should always start by considering your organisation’s strategy. This will ensure that innovation and your organisation’s strategy are in line. For this reason, you should start the innovation process with strategic thinking.
Stage 1: Strategic thinking
The goal of innovation is to create a competitive advantage in the market. In this stage, you should think about how innovation will add value to your organisation’s strategy. Then, you can move on to identify the potential areas where innovation will provide your organisation with a competitive advantage.
Stage 2: Creating metrics and managing a portfolio
When undertaking innovation, you must always be prepared to face failure. Innovation means doing something different and new, and there is no guarantee of success. Even if there’s a reasonable chance of success, there will certainly be many trials and errors during the process. That’s why creating metrics and managing an innovation portfolio is important. Doing this will reduce the risk of uncertainty and balance it out with success. It will also balance out the pursuit of the ideal scenario with learning, taking risks and failing multiple times to succeed eventually.
Stage 1 and Stage 2 of the innovation process provides a framework, and a defines a context for all the remaining stages. That’s why these stages are often referred to as the input stages in the innovation funnel. They also help define activities that will maximise chances of success for the remaining stages.
Stage 3: Conducting research
Stage 2 results in the creation of an innovation portfolio, which includes a mix of both long-term as well as short-term projects across all different types of innovation. However, this is an ideal portfolio, and it needs to be compared with your current understanding of the market to discern any inconsistencies. By conducting research, you will be able to correct these inconsistencies. The research will help you understand several unknowns such as customer behaviour, changes in society and new technologies. In turn, this will expose you to several opportunities to create innovation.
Strategic thinking will help you understand how the world changes and what your customers truly want. This will give rise to new questions which you can answer through research. Proper research will invoke several new ideas across both external as well as internal topics. These ideas that are generated will already be aligned with your organisation’s core strategies. This is because it is a direct creation of strategic thinking, creating an innovation portfolio and conducting proper research.
Stage 4: Gaining insights
During research and idea generation, you may have the ‘lightbulb’ moment. And, by now, you also know that the target and the innovation have been clarified and you also understand the value proposition for your key customer demographics.
Most people think that this marks the start of the innovation process. However, in reality, you’re actually midway through the process. In a disciplined effort towards innovation, you will gain insights from well-defined activities and process and not randomly.
With regards to this, innovation is completely different from generating random ideas. Insight comes from a structured framework that includes close examination, research and development of ideas. Innovation seldom happens and nor can you rely on someone to have a random idea. Rather, it is created because a team is working persistently to create it.
Stage 5: Development
Development in the process innovation is essentially a multi-disciplinary process which integrates the processes of creating designs, engineering, and prototyping of designs and the testing of finished designs. This stage also integrates the manufacturing and distribution, the marketing, the branding and selling a product or a service into a single stage.
Stage 6: Marketing
Marketing is something that is universal to the planning of any business. It begins with identifying a brand, moves on to developing the brand and goes on to preparing customers to chose your innovation. Strategic marketing development will result in rapid growth of sales.
Stage 7: Sales
Here’s where you get the payoffs for all your innovation efforts. Sales will give you financial returns on your innovation. In case your innovation was targeted internally, you will enjoy improved productivity and better efficiency with successful innovation.
Innovation is a highly complex process and managing it properly is a challenge that every organisation faces. However, some companies in the world seem to manage innovation extremely well. This knowledge that innovation is helping many companies earn solid profits should inspire you to develop an innovation portfolio for your organisation as well.
About the Author:
A founder of multiple startups Hader Ali is an innovation & business consultant.
Hader Ali Consultancy works with startups, SMEs, and large organisations. Specialising in business strategy, product/service development, sales & marketing.
To future-proof your business. Hader Ali Consultancy will work with your company to create an innovation portfolio by providing a framework for structured innovation. All while creating an ecosystem of ideas and a culture of innovation.