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In the last article, I suggested that the size of the R&D budget does not guarantee success – that is business financial results – from innovation activities.

Clearly, some industries require a large R&D spend, such as in defence or life sciences. But we know that there is something more than only spending that determines outcomes.

The components of a superior innovation machine

There are a number of elements that make up a successful innovation machine or engine.

At the core there is strategy and processes including IT, management and governance, culture and innovation networks such as a company’s ecosystem. These are the systemic parts of an innovation engine.

And also there need to be enabling factors like “absorptive capacity”- the ability of an organization to sense signals, translate their meaning and disseminate them within and act.

The idea-to-product process

In a recent study we have conducted, we have focused on the “Process / IT” component of the innovation engine.

There is clearly a chain of events from the kernel of an idea to a successful launch in the market. We call this the idea-to-product process.

Actually, this process breaks down into two main sub-processes. The first is more about creativity and finding the “right innovation things”. The second one is more about flawless execution of the defined innovations, about “doing innovation things right”.

The first sub-process creates options or concepts that are attractive for further development.  The first is about reading the environment for impulses and creating strong, well-defined innovation options. This is a highly non-linear and inherently non-stringent process characterized by lots of noise compared to signals including false starts and re-starts and connections between ideas, technologies and involving potentially many players.

The second sub-process is about successful execution of these options, including all the many details that need to be fleshed-out, ending with the successful market introduction of a new product, service or business model.

Frequently, the first sub-process is termed “Fuzzy Front-End” (FFE), the second one the “Efficient Back End” (EBE).

There is a lot of “know how” in the EBE. Living proof of this are widely shared Best Practices, standard Phase/Gate processes that almost every large firm has implemented and Product Lifecycle Management and Project Portfolio Management systems that support all these activities.

The early phase is key to innovation success

Actually, it is the early phase in which “the right innovation things” are picked that has the biggest influence on innovation success and business results.
And yet this is a part of innovation management where there is no clear-cut “how to” yet.

REFLECTIVE QUESTION: What has your firm already done in order to become best-in-class in the execution phase – and in the Fuzzy Front-end which determines innovation success?

Rob Munro

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