Strategic roadmapping events rapidly develop draft business cases for innovative solutions, but do you have the organisational machinery to turn those ideas into value?
Roadmapping: Without implementation, it’s just a nice chat…
You’ve invested in creating your strategic roadmap. You carefully selected the strategic topic: an imperative for your organisation. Then you selected the workshop delegates (it was hard to break into their busy diaries) who brought their own unique but essential perspectives to the day. These times are precious; innovators love to work on the problem, but more than that, they want to see the results of the labour.
So, now what? How will you translate those draft business cases into revenue? What is the line of sight between the workshop and those radical offerings in the market?
Without the organisational “machinery” the day has the potential to be wasted. In practical terms, this means the innovation processes and systems that are needed to translate the revenue potential of those high-potential ideas into successful product launches.
The Workshop is only the start…
Strategic roadmapping has demonstrated its worth. As an established strategic-thinking tool, it has been deployed into sector-level situations, to product technologies and in government priorities to project development teams. As an agile strategic tool, it can be used to explore new topics, like the impact on a company of digitalisation, recharge the innovation pipeline and seek new value creation opportunities for existing technologies. At a larger scale, roadmapping can be used to reset of redesign to the technology strategy of a corporation.
And yet, the end of the workshop is really only the start.
Let’s revisit our innovation heroes from a previous article. Simon is a VP of innovation for a large equipment manufacturer supplying the rail sector and is charged with building new momentum into the product pipeline. At the end of a two-day strategic roadmapping workshop, he has ten very well worked out, but DRAFT business cases for new products and services. These ten were down selected from an original 22 ideas for value creation, developed by the wisdom of his own workshop crowd. He was particularly interested in more radical ideas and worked with the workshop designers to produce a set of criteria to purposefully select radical or game-changing ideas.
And, here is the seed of his first problem. Almost by definition, the radical ideas come with a large degree of uncertainty: the delegates defined this uncertainty range when they selected the 10 ideas. But the real obstacle is they just look different from the typical “innovations as usual” in his company.
You might think, Simon has his work cut out for him. But he’s in a reasonable position with his roadmap that he can discuss with other senior stakeholders in the company. He has a reasoned Why, What and some ideas about How. He can show the vision of where the company needs to get to, where they are now and how to close the gap. But he’ll need to muster resources to develop the innovations down a series of activity phases. As the distance between the idea and the market closes, the uncertainty reduces but the embedded organisational investment rises rapidly.
The Innovation System
The main job of the innovation system is to enact the business objectives of the company. You might know, I am a strong advocate of a system’s thinking approach to innovation management. System Thinking is an ideal way of thinking about messy situations like innovation. Companies under-perform in development activities because their innovation system is under-performing. A system is the mix and interplay of fundamental organisational cornerstones including leadership, organisation, collaboration (open innovation) and tools for managing innovation. Unless a company’s system is set up to handle the volume and scale of innovations, it is very likely innovations will fall down, particularly those of the more radical persuasion.
In broad terms, a company is looking to do the following,
- Ensure that decision-making is well underpinned about progressing the idea and does not reject off hand ideas that are “poor fit, now”. This is a key task of senior leaders in managing the creative tension.
- Ensure and continually check that the idea has a good opportunity and feasibility in the context of its overall strategy and objectives. I.e. Strategic fit.
- Maintain the idea in a portfolio of new ideas and that the uncertainty of the idea is reduced as information improves. The best ideas win, not the pet project.
It could be that entirely new business ventures are possible. Similarly, a corporate new venture system might be a new set of machinery which is beyond the scope of this article and well described by Frank Mattes.
But I want to position this “machinery” in the context of technology AND innovation management.
Technology Management System
Consider how your firm manages its technologies and think of the methods and processes involved. We’re not going to go deep on this topic in this article, but it’s important to recognise, first that there are an interdependent set of management processes and second that the level of maturity is important for successful technology management.
The ISAEP framework was developed to have a coherent conversation about that maturity. It is possible that by assessing its strengths and weaknesses that critical gaps emerge that will hold back innovation and growth. But you can see in the figure below how this works, and it provides a glimpse of what is needed to maximise the success rate from new technologies and innovations. It also might suggest to you that critical capabilities are needed; what I’ve called strategic innovation capabilities. Developing real maturity in this area needs at the very least an organisational development lens and possibly one about transformation, if the company lacks agreed direction about the necessary investment in skills, facilities and general intent about what it focuses on.
The Portfolio Machinery
This article started on a premise that roadmapping as a strategic tool is necessary, but not sufficient for turning ideas to value. The figure below shows how a company, in this case a multi-business unit firm could organise its strategic innovation investments. The key features are these;
- The business as a whole needs to provide direction setting about what it wants to happen in the innovation agenda. It does this through its corporate / business strategy that informs its innovation decision-making.
- The Innovation Decision-Making activity is really a subset of top management who are thinking about how and where to play and what investments to make. In other words, the innovation strategy that makes choices about what buckets to invest in. High potential, possibly transformative innovation projects are considered here. The balance and direction of the innovation investment portfolio are encouraged and pruned.
- A key organising framework of front to back end innovation is the funnel. Ideas are charged to the funnel and progress through a series of decision points until first revenue is earned. It’s a highly dynamic process with ideas progressing, being accelerated, being terminated, merged, spun out or in. Each decision point (or value inflexion points of Mattes and Ohr) has a unique set of decisions to be made and criteria to help make them.
- Multiple funnels may exist to represent the business Horizons (1, 2, 3). Incremental or adjacent ideas will be the normal state or innovation as usual. But the new playing fields need different treatment, different machinery. Radical or new ventures for the corporation are, by their nature, radical. Since they somewhat threaten business as usual or may require acceleration of the value creation proposition that the normal funnel cannot provide, a special system is needed. In the field of corporate start-up / scale-up, this is well explained by Mattes.
- Processes for creating the conditions for new value creation opportunities to emerge need to be installed. Things like design thinking workshop are well documented. Idea Management IT is now becoming pervasive. AI and data analytics that seek insights are coming into widespread play. Technology push/market pull thinking can trigger new products and solutions. Organisations can deliberately set up conditions for systematic serendipity to work. These processes can be set to occur on a routine or as circumstances present change.
- Back to maturity. If the organisation capability is weak where a high potential idea requires strength, then the roadmap will provide early signals about the investment need. Here, bringing in HR / OD to the strategic innovation process provides a mission to really be the business partner that community seeks.
Characteristics of a well-functioning machine
So, how can this “machinery” look when it’s functioning well?
- For the CEO; a boost to the hard financial measures of ROI is realised, but also the good news stories for their firm as an innovator.
- For the CTO / CInO, a clear mandate is provided for the decisions about which technologies to invest in. By taking a portfolio view, giving visibility to decisions about which innovations to back.
- For the innovation manager being able to turn a ubiquity of ideas into relevant market returns. Decision-making improves and precious resources are well deployed.
- For the HR / OD professional providing line of sight between the function and that skills agenda for the future.
Innovation management; portfolio management; roadmapping; ideas; innovation; technology manangement
Rob Munro is a consultant and innovation practitioner taking best-practice thinking on innovation and technology management to solve the CTO’s innovation worries.
If you want to discuss improving your firms own “innovation machinery” contact me.