Planning the Transition Between Front End Innovation & Implementation Processes

Firms are increasingly under pressure to create business advantage from their strategic innovation capacities, but few are realizing the potential of those investments. However, a key weakness in many innovation pipelines in the connection between front end processes and cultures, and the processes and cultures of product development. A key component in gaining the value of investment in innovation is to use a multi-dimensional approach to transitioning promising projects from concept development into implementation.

A welcome change in the recent years has been the ever-growing number of companies trying to better-accommodate the natural tensions between “exploration” and “exploitation,” which the Stanford University organizational behavior researcher, James G. March, so described so well in his article „Exploration and Exploitation in Organizational Learning„.

The business cycle velocities that characterized the time of March’s landmark publication on this topic seem quaint and very-distant from what we experience today: Now it’s possible for a company to go from market-definer to dominating market leader to yesterday’s news in the span of just a few years, as recently evidenced by companies such as MySpace, Nokia, Palm and RIM. The rapidity, and unpredictability, of these business cycle trajectories have created a tremendous amount of incentive and pressure for companies to create- and implement innovation processes which act as sources of competitive advantage for them. There are very many key points in the design of successful innovation processes and cultures, but a key source of discontinuity always seems to be what my clients and research subjects describe as “the handoff” between exploration-focused front end teams and implementation-focused product development teams.

First of all, the use of the term “handoff” already implies that one type of discontinuity is embedded into the culture: That is the idea that there is a standalone, completely-documented, self-explanatory “something” that can passed from one group of people to another, on a monotonic “playing field.” In reality, all successful innovation processes act more like transportation systems, wherein people, information and content move from vehicle-to-vehicle along their way to a destination. Using the transportation metaphor, we can imagine that many different types of teams of experts interact with-, and are responsible for-, successfully-delivered concepts.

When planning the interface points between a strategic innovation environment and an exploitation-focused product development organization, I think it’s useful to repurpose the concept of “compatibility,” that Everett M. Rogers describes in his work “Diffusion of Innovations”. Roger’s concept of compatibility holds that innovations must be consistent with the values, usages, experiences, and needs of potential adopters, in order to be successful. To summarize further, this means that innovations that can be accepted and implemented by a potential user or system must be designed so that they are recognizable and usable by that user or system. In our case, this means means that the output of a strategic innovation group must be made understandable, relevant, and acceptable to an implementation group.

Product Development managers, with the dominant proportion of their work in implementing iterative projects, face extra work in accommodating occasional projects like this within their processes and culture.Nonetheless, this work has now taken on a heightened level of importance: Companies who have difficulty doing this, or can’t, or won’t do it, will fall behind and quickly become irrelevant.

Companies which are consistently successful at gaining value from their front end innovation pipelines take a particular approach to this: Rather than thinking about the transition of an innovation from conceptualization to implementation, as a “handoff” in a relay race, I believe that it’s metaphorically more-appropriate to think of this multi-dimensional process as similar to docking a space ship to the International Space Station (you can get an idea of the complexity, and amount of planning and communication involved in this, through this video of the Soyuz TMA-15 docking to the ISS).

Just as is the case with docking these two space vehicles, companies that handle the transition from concept development to implementation well tend to spend a lot of time in planning and communication, so that teams, goals and approach are aligned, before the actual transition event occurs. I believe that these following dimensions need to be negotiated and planned:

  • Velocity (speed): How quickly can the respective entities process information and concepts? how can their speeds be matched?
  • Orientation: What properties and features does something need to have, in order for it to be accepted and recognized?
  • Proximity (nearness): How far away is the incoming project? When will it arrive?
  • Shape
    • Contour: What resources and capacities must be planned, in order to implement the idea?
    • Size: How much human and capital resources will the project require?
  • Consistency (hard/soft): How far along are the concepts? Are they “hard” and ready for implementation? Are they “soft,” requiring collaboration between the front end team and the implementation team?
  • Resolution (texture): How well is the market defined? Is it still rough, or even “wooly,” requiring a multiple pilots and quantitative work? Is it well-structured, arriving with a solid segmentation?

Identifying the gaps between what an innovation group can deliver and what an implementation group needs, in order to execute is a key step taken by top innovation companies. Recognizing these gaps, negotiating the differences and planning the needs of each innovation program, so that it can be implemented are key steps in the business model for sustainable modern companies.

Mark Zeh

Adopting Disruptive Innovation

We’re all familiar with the Ansoff Matrix, from Igor Ansoff, „The Father of Corporate Strategy.“  This broadly-used model for corporate strategy planning has been subtly iterated since its first publication back in 1957, as pace-of-change- and level-of-sophistication of business have increased. Now it’s most-commonly used in the below form, to help companies understand their existing portfolios, help plan where they can realistically extend and help think about how to build completely-new areas of business.

Innovation Type and Opportunity Matrix

Most Firms now have a portfolio of R&D and Innovation investments, placed across these quadrants, with the grouping depending on their growth planning and tolerance for the various risks in each quadrant.

It’s probably fair to say that every company aspires for a big win in the “New Markets & Customers / New Products & Services” quadrant, but investment there is most-risky and outcomes can be most disruptive to company cultures, existing markets and existing business models.

For most companies, the main barriers to success in the “new / new” quadrant are modeling outcomes, building intermediate project metrics and justifying investments. Projects in this quadrant are the most-likely to be stopped, because the initial business models that have been developed often appear much-weaker than those of competing project investments in other quadrants of activity.

Usually, it’s the high risk in investing in the first few steps that kills a disruptive innovation project in its infancy—costs seem out of scale to the opportunity, level of resource commitment is usually very high, there can be disruptions to present business and time-to-profitability is uncertain.

The question that has often been posed is how companies can “let something grow a little longer,” before making a decision about its fate. Every company wants the growth that disruptive innovation brings, but they lack the tools to plan for it and measure its progress.

The Backcasting model is very powerful for planning investment in disruptive innovation. Using this tool, companies can envision a desired future, then plan backward to the present, making reasonable assumptions about evolving capabilities, resources and business conditions. Articulation of credible project stages and goals allows more-informed decisions about project trajectory, at each stage of its implementation.

This method differs from forecasting, since forecasting depends on assumptions of reasonable growth from existing conditions, based on historical performance and some “feel” from the forecaster. Forecasting can only ever be iterative, while Backcasting is used to build a roadmap, with checkpoints and metrics, to a completely-new future state.

Mark Zeh