Innovation Leaders helping Innovators
The next topic in my series on how Innovation Leaders can help Innovators who have specific challenges, is how to coach potential Innovators to evaluate their ideas.
When Innovators come up with their first idea, they usually are not familiar with the Innovation method and how to evaluate success in each innovation phase. This is where corporate Innovation Leaders can assist, e.g. by creating simple, supportive tools.
Below are 2 examples of how I guided Innovators with “metrics” as they went through the front end of their innovation journey.
1. Ideation phase
- What is an innovative idea? It is an innovative solution that has the potential to address a priority business/customer issue for the corporation.
- How did we evaluate success? If the Innovator could demonstrate that his idea addressed a priority business/customer issue for the corporation.
- The tool we created was kept uncomplicated and descriptive: uncomplicated to avoid “bureaucratically” discouraging potential innovators, descriptive to illustrate the link between the innovation and the priority business/customer issue.
- We named the tool a “One-Pager“. This user friendly PowerPoint slide typically took less than 30′ to develop and had 3 components and:
- a) a brief description of the specific problem the corporation had identified (this was typically identified by the brand teams);
- b) a concise description of the innovative idea (had to be something “new”, i.e. never done before);
- c) how the innovation would generate value (linking back to the problem in ‘a’ above).
- For a concrete use example, click here.
2. Experimentation phase
- What is an experiment? It’s the quick testing of a key assumption: an early indication that the innovative idea might work.
- How did we evaluate success? If the Innovator had identified the key assumptions and confirmed in a quick trial that the key assumption(s) were correct.
- The tool we had developed to identify the key assumptions was simple and directional: simple to avoid discouraging Innovators and to allow them to do lots of experiments if needed, directional because in this stage we only wanted to increase the confidence to pursue a full (quantitative) Pilot later. Our objective in this stage was to help define if the innovative idea was good as-is or needed to be adapted (“learn fast”) or if the idea just had to be declared a no-go (“fail fast”).
- To define the key assumption(s) we used a tool called “Reverse Income Statement“. It’s a very simple spreadsheet with two sets of assumptions. One set listed the high-level, assumed drivers to generate outcomes (e.g. incremental revenue that would be generated by the innovation). The other set listed the assumed drivers for the cost to operationalize the innovation*.
- The Innovator would then identify one (or more) of those assumptions as having the largest impact on revenue/cost and having the highest level of uncertainty. This is what now needed to be validated.
- To validate this, the Innovator would create a quick prototype (this could be as simple as a drawing of the innovative idea) and discuss it with a few stakeholders: externally (e.g. patients, doctors) or internally (e.g. compliance, manufacturing). We kept this test qualitatively because this is typically much faster and less costly than quantitative studies. This validation of their most significant assumptions influenced the decision wether to proceed with a full, quantitative Pilot or to stop the innovation.
- If in the “Reverse Income Statement” spreadsheet (before and/or after the quantitative test) the costs were significantly higher than the revenue, we recommended to significantly adapt the innovation to make the revenue higher or costs lower. If that was not possible, the innovation was considered not viable and stopped.
- For more details on this tool, click here.
These tools and metrics helped to anticipate the typical question from managers when they are presented with an innovative idea: “what is the ROI?”. These early evaluations generated information for the Innovators: it made them more confident to ask for resources for a full Pilot.
As PRWeek said:
“Measurement is about marking, but evaluation is about improving.”
So, as Innovation Leader, I helped Innovators with simple, practical tools to proceed through the innovation stages and progressively evaluate the value of their innovative idea.
More about this topic: “Discovery-Driven Planning” by Rita Gunther McGrath and Ian MacMillan.
What are your thoughts on this: any other ways to provide guidance to Innovators?
Click here for more of my blogs on innovation within corporations: Wim Vandenhouweele