Six Major Stages of Innovation Funnel Management
The innovation process is highly dependent on such aspects as the type of innovation, the kind of organization or the internal structure, so there are many ways to proceed. However, some common aspects integrating the typical “innovation funnel” (see below figure) can be described: framing and insight generation, idea management, development of the innovation project, protection and exploitation of the outcomes and market introduction.
Idea management includes the generation, capturing, evaluation and selection of the new ideas. A systematic idea management process should be defined to ensure a steady flow of new ideas.
Development of the innovation projects following a methodology is recommended. For example, a “phase gate” process or an innovation thinking process, or possibly combining both of them. The prime benefit of a phase-gate process is the discipline it imposes on setting a sensibly detailed project plan with clear objectives and deliverable that is monitored as the project unfolds.
Protection and exploitation of the outcomes of innovation activities should be made using the best option of protection in every case, and following the defined mechanisms and agreements for exploitation, if applicable. For a successful innovation, the results need to be introduced in the market or implemented in a process and produce a return to the organization.
Market introduction of the innovation can include the following steps:
- identifying the intellectual property environment (freedom to operate, licensing potential and risks, etc.) on the target markets;
- Developing the marketing and sales plan;
- Securing funding and organizational resources for market introduction and expansion
- establishing production, supply chain, customer support and feedback and training of the involved disciplines as required.
Enhancement of the innovation includes monitoring the business impact and life cycle of the innovation, incrementally improving it until ultimately it is phased out and replaced.
The results of the innovation process for the organization are financial and non-financial. The organization should specify what, how often, against what and by whom results should be assessed. The organization should define indicators to assess innovation results.
Financial indicators for innovation results can include:
- profit growth rate;
- revenue growth rate;
- cost savings for organization and clients;
- growth in operational margin;
- return on innovation investment.
Non-financial indicators can include:
- number of ideas put through the innovation process;
- market share;
- efficiency of processes;
- brand awareness and reputation;
- impact in the number of employees as a result from innovations;
- intangible assets (intellectual property, human resources, know-how, relationships, etc.);
- ecological and social sustainability as a result from innovation (reduction of emissions, reduction of energy consumption