The new extended innovation funnel

The ideas funnel has been with us a long time. We put our ideas into the funnel and then through a process of elimination out ‘pop’s’ finished products. Henry Chesbrough’s famous depiction of the Open Funnel has continued that concept, that ideas enter the more ‘open’ innovation process and go through a more ‘staged gate’ or equivalent process to emerge as the finished product or even spun-out- all well and good.

In the past few weeks the funnel has been constantly coming back in my life. It has been bugging me. Recently I was at a European Innovation Conference and we got into a roundtable discussion on managing ideas and up pop’s the fuzzy front end and the funnel and putting ideas through this. To be provocative I said “well ideas are actually in the middle of the innovation process” and we got into a significant debate on this and concluded that we all did not share a common language on this or understanding of what I was struggling to articulate.

So let me lay out my view. Firstly this was not as inspired as an insight I can  fully lay claim too as mine. I had read somewhere this very point, ideas lie more in the middle of the innovation process but just could not remember where I had read it- grey cells are my excuse.

On my return from the conference and the catching up that always follows I have now sat down to investigate where I had read this. It was staring at me in my document file, Langdon Morris  of Innovation Labs (www.innovationlabs.com)

Langdon Morris and his book “Permanent Innovation”

Langdon Morris wrote an excellent book “Permanent Innovation” back in 2006. I thought the book was great, full of really useful and practical thoughts for anyone involved in innovation or wanting to understand it well. Langdon has just updated this book in 2011 under a creative commons licence, with some rights reserved. You can download this book at  http://bit.ly/fgpNd2.

In his author’s notes for the revised version he makes the following observation that made me (also) rethink the innovation funnel and process:

“The major improvement involves a common misperception. Many people believe (and I used to be one of them) that innovation starts with “ideas.” People, the common view holds, come up with ideas, and then they turn them into innovations. The managed innovation process was therefore assumed to begin with ideation.

After following this approach for some years ourselves we’ve found that it’s not an accurate description of how innovation actually happens, nor is it an effective guide for how it should be managed. Instead, the most successful innovators are those who begin from a strategic perspective, thinking broadly about their goals and the key trends in society and technology, in order to define their strategic intent. They then develop detailed models of risk and reward as it pertains to the uncertainty of innovation development, and all this gets translated into “innovation portfolios” of their innovation investments.

The design of this portfolio embodies a set of themes and goals, and also identifies many unknowns, or questions. The pursuit of answers to these questions is the purpose of research, and the output of research is then the input to ideation.

In this way, the innovation process is inherently strategically aligned, risk-managed, and goal-directed. And as you undoubtedly noticed, ideation is definitely not the beginning, it’s the middle, and hence the need to revise the Permanent Innovation model to reflect this more accurate and more useful understanding.”

Jeffrey Phillips also then added his view for more thinking.

Then I get back and there is a great blog from Jeffrey Phillips on his Innovate on Purpose site of http://innovateonpurpose.blogspot.com/. This was dated March 31st and entitled “The evolution of the innovation funnel”, which can be read here: http://bit.ly/gIUB0J

Jeffrey comments “However, the funnel still seems too focused on ideas.  Our suggested revision to the funnel is outlined below.  This next iteration of the funnel incorporates opportunities, ideas, technologies and even products, considering “spin in” and “spin out”.  Ultimately the funnel is a bridge between unmet customer needs and the solutions we offer.  The funnel should consider far more than just ideas.  After all, in an open innovation model, we can accept and exchange ideas, technologies or even products that may address a customer need or emerging opportunity.  Limiting the funnel to ideas reduces its capability and power and creates a very limited metaphor for innovation teams”

He by the way, also offers a terrific slideshare as well on this through Ovo,  http://slidesha.re/idByw2. His view of the funnel was this:

Jeffrey Philiips/ OVO suggested funnel

So my three points seems to collide- a collision point I could not ignore.

So I firstly wanted to articualte my thoughts that I failed to do at the conference. Then as I got back into funnels and their ‘place’ in the innovation process I wanted to lay out my thinking.

Let me offer my thoughts on the insights, the suggestions and takeaways I have got from these colliding points.

I see this as the extended innovation funnel or alternative

I see the funnel differently. Initially my ‘flipping around’ was to get everyone quickly grasping a well established concept, the funnel, to see it in a new way. It partly worked in its central message of where ideas fit. Since I have now sat down I have moved from this and would like to offer this as my contribution to funnels, ideas and the extended innovation process. I think it reflects more of todays realities:

The new Extended Innovation Funnel v1

Let me briefly explain this, it certainly takes clearly on board the correct view of Langdon Morris and builds from this in a more detailed way. Also Jeffrey Phillips prompts us all to move from ideas to concepts.

Let me briefly explain this model and its reasoning.

The evaluation of ideas is becoming more refined also before ‘it’ ever enters any ‘funnel’ or evaluation process. In many open innovation initiatives the bigger company is not looking for ideas, they are looking far more for at least partly ‘hard baked,’ or proven concepts, that they can quickly scale or ramped up. The concept of ‘just’ ideas is not a reality for many any more, they are to time consuming and costly in resources and energy. They want quicker answers in growth contributions from outside. Scaling up quickly to ‘grab’ the opportunity.

The larger organization involved in open innovation, or its search and relating of ideas are based more on a concept that has some proven value is changing open innovation.

These ‘ideas’ are exploring different connecting points across varied sources and collaborators. They go through a clear match in strategy, capability, cost, return and value in a risk assessment before and they might even loop back for further research, before they enter the internal innovation process of going through idea conversation to meet commercialization objectives. Then and only then, do you enter the more classic innovation process of converting, confirming and concluding concepts before entering the market place. This inside-out process follows each organizations established stage gate or criteria milestone system of checks to process these concepts through to commercialization, often called the process of innovation ‘attrition’ or validation.

There is much more to bringing in from outside-in with a high level of Business Develpment actions and then a more inside-to-outside development process to take it through or spin it back out. This whole process is so much more than the present concept that ‘just’ ideas enter the internal process, are ‘staged-gate or managed through the equivalent accepted internal process that we seem to talk about today. Ideas are entering into this in a far more refined (defined) way than is often not fully appreciated and these are far more in the middle of the whole innovation development process.

This for me is the new emerging funnel, the extended funnel that depicts more of the present practice surely? Do you agree?

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6 thoughts on “The new extended innovation funnel

  1. Ctd…
    The middle of the funnel being a place of accelerated time and compressed space. This would translate into the view that a specific part of the process follows that rule. From my experience as a long time incubator designer and manager, this is the case of the idea to prototype phase. Having teams focused and collaborating on an accelerated / constrained schedule, and on the same location is key.

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    • I do like your “accelerated time and compressed space” comment. What is entering the internal ‘compression’ chamber is being increasingly demanded that it has to be accelerated and having a reduced schedule or development time to market. This is actually partly what is pushing back what enters this compression chamber and trying to ensure what is entering has ‘seen’ value to expend internal resource and effort on. Notably some large companies are splitting Business Development and Organization/ Divisional to manage different types of innovation (improved product, new in category, new in adjacent category and new to the world). These different innovation dimensions need different handling and the breaking down of the evaluations is being pushed further back and aligned BEFORE it enters the chamber. Speed, resource constraints, size of risk all are increasingly more Strategic, needing more evaluations as organizations ‘up the anti’ and demand figures moving towards 50% coming from the outside. Risk evaluation and Strategic Alignment are increasing in their importance

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