The fuzzy front end of innovation confronts you with a lot of questions. In my new book ‘Creating innovative Products and Services’ I try to solve them. My last blog discussed X-factor ideas. But, how will you get ideas with the X-factor? There are at least five choices you have to make:
- When: now or later?
- Who: experts or internal team?
- What: revolutionary or evolutionary ideas?
- Which criteria to use?
- How: the creative or structured way?
1. When: now or later?
It is a fairy tale that companies innovate continuously. Of course there is a R&D or innovation department continuously working on new concepts. And a phase gate funnel full of new initiatives is monitored on a permanent basis. But the board will only approve real innovations and accept the necessary risks when they have to because all less risky instruments failed to grow the business.
The completion of the innovation process – from the idea to introducing it on the market, takes at least 18 months. So anticipating a change in the market is very important in order to lead your market and react timely. Even though you notice holes in the roof better during winter, it is more easy to make alterations during the summer. The ideation process can only succeed if the company has the financial and mental space in order to do this. If the board of directors and co-workers are under a lot of pressure you should think twice to start an ideation project. It is best to wait until the dust has settled.
2. Who: experts or internal team?
Is it not possible to create better ideas with a small group of experts than with a group of internal managers and co-workers? The answer could be yes. However, what is the use of brilliant ideas if there is no support in the organisation. So every idea might be rejected because of the ‘not invented here’ feeling. When your colleagues (who also play a role in the development and introduction process) participate in the ideation of their own innovations, it creates an enormous positive energy and creates speed, which is visible and helpful in the innovation delivery phase. For this reason I support a team approach. What’s more motivating than making your own children yourselves?
3. What: revolutionary or evolutionary ideas?
Which ideas for a new product, service or business models should you aim for: revolutionary or evolutionary? Evolutionary ideas are typically “better” concepts: the better supermarket, the better car hire service or better detergent. It are often up-market innovations, which offer more at a higher price. Revolutionary concepts are really different. Consider the origin of TomTom. Existing manufacturers of built-in navigation systems focused their strategy on the automobile industry and dealers. From the start TomTom considered route planners as consumer electronics and thereby handled completely different criteria for the product, such as being mobile, easy to operate and cheap. The first Tom-Toms where half the price. In this way they opened a new market: the consumer market for route planners.
The type of innovation on which you should focus depends on your current role in the market and the characteristics of your company. If you are a market leader in an existing market, with low potential for growth, you should to dare to go for unique ‘new-to-the-world’ innovations. However, if you are a relatively small newcomer in an enormous growth market, then I can imagine you first want to conquer the existing market with new and improved versions.
4. Which criteria to use?
Often an ideation project is started because a senior director said: we have to come up with something new. And then it is up to you. And how often did you experience that when you came back with list of innovative business ideas none of them were accepted? It’s very hard to meet fuzzy expectations. So to be successful you have to appoint clear criteria the new ideas have to meet before you start. Just ask your Board member questions like:
- How much turnover must the new concept realise?
- And what’s the minimum profit margin?
- Should the new concept be new to the market, new to the country or new to the world?
- Is there a specific target group or market is should be aimed at?
- To what extent should the new product concept be the talk of the town among potential customers?
- To what extent should the new product concept fit the current brand values?
- Are we obliged to make the new product concept ourselves (with our own manufacturing facilities) or can we look for partners?
Making expectations explicit before you start. It will give you focus.
5. How: the creative or structured way?
Creativity plays a major role ideating new innovative concepts. A lot of people think you can only be creative if you do not have to consider any constraints. So you can really think outside the box. I agree you cannot discover new oceans unless you lose sight of the existing shore. But your organisation is not waiting for crazy ideas only. It’s looking for ideas, which will have to meet the criteria we just discussed. Therefore you need an ideation process to get you to concrete mini new business cases, which will be attractive and deployable for your organisation. And creativity alone will not get you there. You need a structured approach: one in which creativity is well facilitated.
In my next blog on Innovation Excellence I will describe a structured 5 step way to realise ideation projects successfully, which is called FORTH. The FORTH innovation method is an acronym and stands for Full steam ahead, Observe and Learn, Raise ideas, Test ideas and Homecoming. It is an inspiring practical method in five steps to create new products, services and business models.
Gijs van Wulfen leads ideation processes and is the founder of the FORTH innovation method. He is the author of Creating Innovative Products & Services, published by Gower.