Author: Kristian Elmefall

How to create continuous innovation

When I talk to customers about innovation and about creating continuous innovation, it is often concluded that they lack a strategic and systematic approach to innovation. They lack an innovation process or an innovation system. Companies must realize that the innovation process is one of the basic processes in today’s business. It is not often thought that it is enough to hire the figure to the left in the picture below, but it is actually needed a profile like the one on the right in the picture for inventions to become innovation ie. commercialized and create value.

For successful innovation, more profiles are needed in the management team mentioned in the picture below, but I save the different profiles to another post. In order for it to be repeatedly innovation, an innovation system is actually needed, but it does not have to be so remarkable. In a discussion the other day, a customer said “and what is that innovation system we are going to develop?” And with development he meant programming. I then realized that I probably probably went a little too fast. That’s why I write this post.

I’m going to focus here on the five steps in the middle; direction, insights, ideation, selection and decision. I assume that if you want to drive their innovation strategically, you also have a strategy for their company and, as I wrote earlier, I do not intend to go here on how to evaluate and build their management team for innovation, nor does the execution phase now touch me. That saves me another time.

When you know your business strategy, you need to decide in which areas you should drive innovation. H1-H3 shown in the picture refers to McKinsey’s Three Horizions

which in principle means that you have to divide their innovation initiatives into those to be done now (H1), those who will deliver value of 12-36 months (H2) and those who will deliver value + 36 months (H3). I like this model, but then @Steve Blank presented a new view of the one I mentioned in a recent post. Steve Blank’s article partly explains my motivation for business model innovation.

When one has defined in which areas one wants to drive innovation and on what horizon the various initiatives are to be run, it is time to retrieve information and formulate innovation campaigns. These leads, in turn, to a lot of ideas that are clumped together, evaluated, experimented on to create a decision basis for innovation board that decides whether the idea is good enough to develop and commercialize.

So what do you have to do to have an innovation system then?

1. Be clear with the strategy of your company.
2. Decide in which areas you want / need to innovate.
3. Get information and inspiration.
4. Create ideas using as many people as possible in the company and perhaps with open innovation even outside the company.
5. Test your ideas as easily and cheaply as possible.
6. Decide on clear predetermined bases if this is an idea that you should develop and commercialize.

The similarity between building an MVP and wallpapering

After my last post on how to use in Lean Startup in internal projects, I have had several interesting discussions on how to work with Lean Startup and different angles and tools within it.

What is striking in most discussions is that having started working with Lean Startup in some way, they have taken on MVP (minimal viable product). What is equally striking is that you do not take the time to formulate hypotheses so that the validated learning, which is the very purpose of an MVP, becomes very limited. For this purpose, there is a framework called LOFA (Leap of Faith Assumption). When we cut, reason and argue around new products and services, it is natural that we make assumptions. What is important is that we understand that it is assumptions and not truths, and that we identify when we do it. We will use these assumptions then when we work with LOFA and make our MVP.

(Photo: Yuliya Evstratenko/Shutterstock)

The basic hypotheses

There is always a basic hypothesis that one must consider, the “value hypothesis”. That is, if a customer finds pleasure in using the new product or service? If it is a new product or service for the market then there is another fundamental hypothesis to test and it is the “growth hypothesis”. Is it a working way that you thought your customer base should grow on?

Let me give two examples of these hypotheses.

Value-hypothesis:

“Sugar cake is good, falu sausage is good and caramel is good. I will launch a new dish that is sponge cake with falu sausage and caramel, it will all love ”.

Growth hypothesis:

“By offering the dish free of charge to a number of schools, the children will start to love it and nag their parents so they have to go and buy it”

 

There are now grounds for building an MVP. I can do the right thing in my kitchen and offer it to the school where my son goes. Then I can find out:

1. Does the kitchen receive a trial right in that way?
2. Do the children think about it?
3. Are they going to nag their parents so they try to get the right?
Thus, the smallest possible experiment that creates learning that is validated by potential customers.

When we validated these two hypotheses, we can continue. It seems that this can be a good idea. Make a list of other important hypotheses, which hypotheses must prove true for this project to succeed? That is, our Leap of Faith Assumptions. Don’t overdo it but make a reasonable list of relevant hypotheses (the price of eggs for the sponge cake is probably not where this idea will steal). Then draw them into such a four-liner, and focus on validating those in the upper right quadrant.

When we validated these two hypotheses, we can continue. It seems that this can be a good idea. Make a list of other important hypotheses, which hypotheses must prove true for this project to succeed? That is, our Leap of Faith Assumptions. Don’t overdo it but make a reasonable list of relevant hypotheses (the price of eggs for the sponge cake is probably not where this idea will steal). Then draw them into such a four-liner, and focus on validating those in the upper right quadrant.

Remember, until we have validated learning, we just guess and validated learning arises only through meeting with customers. So what was that beginning with?

What is the similarity between wallpapering and building an MVP? Well, you often cheat with the preliminary work.

Fuse
INNOVATION • ACCELERATION • DIGITALISERING