Managing innovation is a complex task. Many things need to go right before an idea born in a research lab finds market success. On this way there are many open questions for the ambitious innovation manager: How to measure performance and ensure the return of investments in research and development? Which input is producing which immediate outputs and longer-term outcomes? Or, put shortly, what are the ingredients and recipes for innovation success?
When we talk to a potential customer for the first time, we get asked similar questions: What will the results be? What is the value of your services? Decision makers expect numbers and figures that can be easily evaluated. Innovation, however, is a distributed and long-term process; it is, indeed, not one, but many processes that need to be developed and aligned. That is why the change that we produce through training and consulting is sometimes hard to measure in monetary units. Additionally, our services still produce results long after we are gone and it is sometimes only possible to see the impact ourselves when our projects are long-term.
Recently, we completed a two-year project with a client. After the closing ceremony, one of the managers came to us and proudly said: “We now achieve in six months what took us 24 months before.”
This efficiency indicator is so clear that decision makers can buy into it—and it also led to the catchy headline that maybe made you start reading this article.
For us, though, our impact is much more than what can be measured in a simple efficiency performance indicator. For many years we have been involved in the field—studying research and development management practice of global players as well as of medium-size firms and start-ups. This is how we developed our own model, looking at management of research and development and beyond to identify the ingredients and recipes for innovation. The secret is the integration along the innovation chain and ensuring the constant maintenance and alignment of processes and results. To do so, we focus on 12 steps that we integrate to connect the innovation lifecycle from ideas to products.
Step 1: Discover the Future
In today’s “economy of expectations”, where the quality of products and services continuously increases, the ability of companies to create new opportunities becomes especially valuable. To discover future opportunities for business, we need to identify and analyze trends to align research potential with market opportunities. This helps companies to come to the forefront of innovation in products, services, and business models in a larger ecosystem. Today, no company is too large to escape a trend, but especially for startups this is an important issue to attract investment.
Step 2: Accelerate Performance
The unpredictable nature of research and development activities makes R&D performance management challenging. Nevertheless, we work on defining strategic goals and connecting them with performance indicators on tactical and operational levels. A consistent process of planning, measuring, analyzing and improving the activities of the R&D department contributes to the effective implementation of corporate strategy.
Step 3: Ideate Outside the Box
We work with design thinking methods to infuse creativity and customer orientation in engineering processes. Prototyping and modeling are instruments to generate ideas and allow testing ideas on a small scale. The iterative nature of the process helps to fail cheaply, adapt quickly and roll out well-refined products and services. Building empathy with customers, users and other stakeholders is a major component and a creative source for new ideas, and greatly beneficial for global players.
Step 4: Manage Idea Portfolios
Not all projects that originate in R&D as products and services finally appear on “the shelf”. A company needs to explore a variety of new technologies and projects before it can choose the ones that will make it to the market. Like in a stock portfolio, we work on balancing risks and ensuring that our clients have ideas in their portfolio that will prepare them for the future.
Step 5: Protect Intellectual Property
Today, powerful technologies and an uneducated behavior with intellectual property (IP) make it incredibly easy to copy companies’ inventions. With patenting and other forms of legal protection, IP management has to become a vital part of the corporate strategy that enables companies to sustain their competitive advantage. We bring in the processes and legal advice to create and protect innovation and secure our clients’ market positions.
Step 6: Transform R&D Results into Products and Services
Following a well-structured process of creating a business model and hypotheses, experimenting with a minimum viable product (MVP) will drive the creation of an action plan that systemizes the process of technology transfer. Aligning the inventions with competition and customers helps finding successful business opportunities, ensuring a meaningful application of inventions that customers are willing to pay for.
Step 7: Become Agile
Agile R&D processes allow focusing on delivering the highest business value in the shortest time and increase visibility of the development process to those responsible for the outcome. We work with the teams to make them think in iterations and redefine responsibility and work processes. Our key goal is to increase transparency in project teams and to improve flexibility to react to new demands. Large and traditional firms can especially see tremendous benefits here.
Step 8: Manage Product Success
To reach business objectives, a company needs to effectively manage a product’s lifecycle, closely aligned with corporate strategy, expectations of stakeholders, and customer needs. Efforts from the whole product team need to be coordinated to ensure product success. The role of product manager is often not clearly established yet, but greatly supports the product success.
Step 9: Exceed Customer Expectations
When developing a new or improving an existing service offering, service design defines all the touch points customers interact with during, before and after the service delivery and integrates them with your business functions. When the products get into the hands of customers, this relationship continues and needs to be maintained. This combination of product and service or the service itself represents what the customer knows about your company.
Step 10: Innovate Together
We focus on jointly creating value for customers, partners and the company in the long term. Customer relationship management integrates internal processes with external networks to deliver value to customers, while partner relationship management supports this process through the establishment of a network of collaborators and development of an ecosystem. We base our work on customer- and partner-related data, but also aim to create close personal ties.
Step 11: Manage Knowledge Flows
Knowledge management approaches will enable your teams to use the knowledge concentrated in your company in a fast and efficient way. They will accomplish more with the access to all experiences the company has lived through. Through the application of an integrated system of processes, companies can ensure effective accumulation and use of their knowledge to solve their strategic and tactical objectives.
Step 12: Nurture Talent
Outdated motivation methods, ideas of climbing the career ladder and material rewarding system may not correspond with the aspirations of technical personnel. We make companies proactively help their employees grow, contribute to their development and reward for successes. After all, innovation requires a work culture that welcomes new ideas and demands radical thinking.