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Innovation Management Essentials - Serial 2: Common Models of Innovation Management

By : Xuan|23 Oct 2018
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In the last blog post of the same series, we went through the definition of innovation management, the key aspects of it, and its methodologies and approaches. In this following series, before going through the common models of innovation management, let us take a look at what successful innovation management actually look like. 

 

What does successful innovation management look like?

There is no simple answer to this question, as it is always dependent on the unique situation of each organization. However, the most innovative companies are normally the ones where the 5 aspects of innovation management - ideation, resources, structures, strategy, and culture aligned with each other. 

From our research, organizations that are considered to be the most innovative, creating disruptive products or technologies all the time tend to have these common characteristics:

  • Have a unique, clearly defined, and relevant strategy that everyone at the organization understands;
  • Accept that failure is always a possibility and are not afraid of it;
  • Structure a repeatable and sustainable innovation process;
  • Trust, encourage, and reward talents;
  • Organize around small teams;
  • Have cross-functional teams with autonomy;
  • Have the resources and structures in place for making sure things happen.

 

Common models of innovation management

Innovation management is complicated. To achieve the best possible results in doing it, and to be successful at innovation management, there are some common models organizations could choose from according to their needs.

The most common processes for innovation management:

  • Technology Push vs. Market Pull
  • Phase-Gate Process
  • Lean Startup Model

 

Technology Push vs. Market Pull

The push-based model is a more internally and technologically driven approach, whereas pull-based model is more customer and market-oriented approach for managing innovation. In other words, technology push model is the one where products and processes at the core of innovation, usually driven by internal or external R&D activities, whereas market pull model is driven by and designed to meet the market demand.

Push-oriented organizations usually focus on searching for the best ways to address the challenges and the users, usually with new technology. Pull-oriented organizations, in contrast, are looking for ways to adapt to changing markets and customer demand, and usually focus on listening to customers, learning from them and moving fast in their innovation work.

While push-oriented organizations are usually traditional and established ones, and pull-oriented ones are operating at an early stage, such as startups, they could usually intertwine. For example, some startups are building technology to solve problems using the push-based model, while some large organizations are taking radical initiatives within the organization. 

There is no better or worse here - they are simply aiming for addressing different challenges. The question to ask is which one of the approaches fit your organization or your need before you choose.

 

The Phase-Gate Process

The phase-gate process (also referred to as a stage-gate process or waterfall process) is probably the most well-known model in developing a new project, product, process, or business initiative. It has been around since the 1940s, and was further refined by Robert Cooper in the 1980s. 

The process separates the idea development process into five main phases. Between phases, a gate is used to determine whether the development should move to the next phase or an iteration should be applied in the current phase before moving to the next one. It is mainly used to reduce project uncertainty and cycle time. 

The phase-gate process guides idea development through five phases from ideation to launch as follows:

Phase 0: ideation

In this phase, organizations tend to discover opportunities through brainstorming and market research among all its stakeholders, including employees, customers, partners, suppliers, etc.

Phase 1: scoping

The main goal in this phase is to evaluate the idea and its market. The strengths and weaknesses of the idea, competition, and customer demand should all be evaluated to determine if the idea is going to move forward. 

Phase 2: building business case

This is the last phase of concept development and is crucial before starting with the development of the actual product. There are four main steps to conclude this phase: 

  • Product definition and analysis: This step provides information to define and justify the development of a new idea;
  • Building the business case: This step provides documents that define the idea; 
  • Building the project plan: This is a list of all tasks that are planned during the entire development process, and the resources it takes to carry them out; 
  • Feasibility review: This step analyzes the information provided to decide whether or not the product should move forward. 

Phase 3: development

The ultimate deliverable of the development phase is the prototype, which will undergo extensive testing and evaluation in the next phase of the process. The product's marketing and production plans are also developed.

Phase 4: testing and validation

The testing includes team testing for problems and issues in the product. Then, it goes for the field test, which includes consumer testing for the product in a beta version and a marketing test to identify market feasibility for the product.

Phase 5: launch

The product is introduced to the market based on a pre-defined marketing strategy. In this phase, the marketing and sales team play essential roles in creating the market need and increasing exposure for the product.

The advantages of the phase-gate process is that it ensures consistency among your ideas and guarantees that each innovation matches the general standards. It also helps reduce complexity for large projects, making the decision-making process smoother. One problem with the process is it would potentially interfere with creativity and innovation, as overly structured processes may cause hinder the largely iterative process of innovation.

 

The Lean Startup Model

The lean startup model is proposed by Eric Ries in his book of the same name. It is a methodology for product and business development. Although it usually is not considered as an innovation management process, it is designed with the same goal as the pull-oriented innovation management approach to address market risk and customer demand fast to find the product market fit as soon as possible. 

The main idea of the lean startup model is to rapidly test and validate the assumptions related to the product market fit between your idea or innovation and your target market in order to learn and adapt as fast as possible.

Build-measure-learn is the main component of the lean startup model. It is a framework for establishing and continuously improving new ideas, products, and services quickly and cost-effectively.

Building Minimum Viable Product (MVP) is another main concept in this model. The idea is, instead of taking a lot of time and resources to build a product that nobody knows if there is a market fit, build the most version of it to test the water. 

The lean startup model is a faster way to learn what works. Organizations are able to increase the speed of development and reduce development costs, thus lowering the overall risk of innovation.

 

What is the right model for your organization?

To figure out the right innovation management model for your organization can be challenging, as innovation is higher unpredictable and the only way to see if something works for you is to actually try it out. We do, however, have some tips to help you figure out it.

1. Analyse your current situation. 

2. Educate yourself on all the models. 

3. Start simple.

4. Keep testing until you find the right fit.

And keep in mind that there is no right or wrong, better or worse, there is only fit or not fit. And if you are working in a larger organization, you will almost inevitably need more than one model for different types of innovations in different parts of the organization.

 

In the next article of the series, we will take a look at key innovation metrics to drive innovation. Stay tuned!

1. Brem, A. (2008). The Boundaries of Innovation and Entrepreneurship: Conceptual Background and Essays on Selected Theoretical and Empirical Aspects. Gabler.
2. Cooper, R. (1986). Winning at New Products. Addison-Wesley.
3. Ries, E. (2011). The Lean Startup. Crown Publishing Group.

 

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