The Innovation Cycle vs The Innovation Funnel
Innovation is (simply put) the process of discovering and developing valuable solutions to important problems. There have been various ways of visually representing the process of business innovation. The Innovation Funnel has been a very popular visualization of that process. However, in my view of the process of Innovation today, it is more closely aligned with the diagram above.
The reasons I prefer this visualization as a cycle to the Innovation Funnel are as follows:
1. Innovation is continuous
The Innovation Funnel suggests a linear process with an end. Innovation should be never ending. “Product-market fit” is fleeting. You need to keep rethinking and refining the solution, because new and better solutions and technologies are invented daily. A business must never think it has solved a problem once and for all. The innovation process simply achieves a “good-for-now” solution and hands it over to the commercialization process
2. Innovation should be Agile
The insight behind the highly successful Agile Methodology for project management is that every project is inherently non-deterministic and experimental. The objective of a project is not to plan and build a definitive solution, it is to expect the ultimate solution to be different and to plan accordingly. Any initial plans are at best hypotheses of the solution, to be validated as we go along. Given the need to iterate , the process has to minimize wasted time and resources.
To represent this thinking, it is key to designate the goal of innovation as “Validation” and to anticipate a reversal to the drawing board if the initial hypotheses are not validated.
It is difficult to represent Agile thinking and the expected reversals in a linear visual model.
3. Innovation needs to plan for potential failure or falling short
In the process of innovation, you will fail sometimes, and you need to plan for that. Fear of failure is why many organizations fail to innovate. To signal that it is OK to fail, you need to clearly plan and inform everyone what you will do with projects that do not meet the validation goal. However, many diagrams of the innovation process do not clearly show that Failure is expected and how to deal with this.
If at the end, a project is not graduating to commercialization or scaling, what is the plan for it? Outright termination needs not be the only next step. Options like spinoffs, licensing, could also be planned for. Innovation projects could be auctioned to investors to recover some value. You never know what you may get in return.
The important thing is plan for the end.
4. Innovation needs to be a separate process from Commercialization and Scaling
Commercialization or Market Development or Scaling is the graduation step from successful innovation. The processes of fully and efficiently commercializing or scaling a solution require very completely different mindsets and approaches than the processes of experimentation and validation known as innovation. The professionals who excel at, and in many cases prefer careers in, planning and running the commercialization of proven solutions often do not have the same mindset and skills required for successful innovation. Their goals are also different. This is why the two processes are typically separated.
This doesn’t mean that the two processes should not be linked. It simply mean that they should be distinct and should be viewed separately.
As the students and experts on innovation learn more about what leads to successful business innovation, I expect this view to continue to evolve. I would also love to hear what others think.
In conclusion, I must thank my colleague, Dmitry Karpov whom I have worked with for the past one year. Our work requires our team to communicate about innovation often, both with others and with each other. This mental/ visual model is derived from the conversations we have been having while working together.
Disclaimer: The views of third parties set out in this publication are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made. This article was not intended to be relied upon as professional advice. Please refer to your advisors for specific advice.
