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Organizations seeking better business
results from innovation often confront a paradox: On the one hand, they can point to an impressive track record of innovations that contributed to their current market position. On the other hand, their people are unable to explain how, precisely, this innovation success was achieved. The first step toward resolving this inconsistency requires recognizing that, in most organizations, a great deal of innovation happens informally.
An innovation pathway is the set of steps an innovation takes from initial idea to implementation. Like people, innovative ideas have their own life cycle. While the evolutionary details of different innovations vary widely, there are four general stages that typically occur, called the “universal innovation pathway” (UIP). Of course, most formal innovation processes are more complex than this, but at a high level, they can all be mapped onto these four universal stages, each of which involves activities and resource allocation decisions.
Universal Innovation Pathway Framework
Case Study
Consider the case of an insurance company we worked with that had reached its top-tier market position, in part, by introducing a number of industry-shaping innovations over the years. One of these was an early mobile app that enabled policy shoppers to interact via their phone with
a sophisticated virtual agent powered by artificial intelligence.
This project started when a junior information technology (IT) developer, whose outside hobby was creating gaming apps, decided to spend time experimenting with a mobile agent app as a personal challenge. After developing a prototype, he shared the result with his manager, who was enthusiastic about the idea and encouraged him to continue. Shortly thereafter, the company chairman visited their department, where he was shown a demo. The chairman was so impressed he pushed for it to be resourced with a project team, and from there, it followed the formal product development process. While the idea went through a series of well-defined stages all the way to launch, its genesis and early development were the product of chance rather than established process.
Scroll on to see how this particular innovation fits into the UIP framework.
The solution
is scaled.
scale
The solution is tested and refined.
test and refine
A possible solution is developed.
solution
A problem worth solving is identified.
Problem
01
A problem worth solving is identified.
• The customers’ need was identified by the junior developer.
• The opportunity was assessed by the junior developer as high value.
• Buy-in and validation was sought through informal conversations
with colleagues.
• No formal resources were perceived to be available or accessible
to the developer.
• The developer made the decision to allocate personal time
(nights and weekends) to research and explore the opportunity.
1 month
Activities
Resources
Duration
• The prototype was developed and shared informally with friends
and colleagues.
• Additional validation was sought from the chairman when he
visited the department unannounced.
• The chairman elected to sponsor the project and helped to
ensure resources were allocated to its development.
• Initially, no formal resources were allocated, although the
junior developer did dedicate his own personal time.
• Post-intervention by the chairman, $250,000 was allocated
(in employee time) to cover development.
• A temporary team was assembled from existing resources
within the developer’s team.
3 months
Activities
Resources
Duration
02
A possible solution is developed.
• Development and testing proceeded according to the organization’s
existing new product development process.
• A market assessment was retroactively completed.
• Quality assurance testing was also conducted.
• The organization funneled $2.8 million into the project
throughout this stage.
• The product team grew from four to 11 employees.
• As a byproduct of the organization’s quarterly business review
and capital allocation process, resources were allocated directly
at an enterprise level rather than funding the project through the
business unit’s budget.
7 months
Activities
Resources
Duration
03
The solution is tested and refined.
• The marketing department stepped in to advertise the new product.
• A road map was developed to help ensure alignment and
ongoing momentum.
• More than $5 million was allocated to support the marketing
effort and continued product development.
• Resources were allocated as part of existing strategic planning
and budgeting cycles.
Ongoing
Activities
Resources
Duration
04
The solution is scaled.
The best way to demystify informal innovation
pathways is to map them at the enterprise level.
We call this “innovation archeology” — the study of successful and unsuccessful past innovation projects. This exercise can help to shed light on common patterns, enablers and barriers to innovation projects. This requires an assessment, in aggregate, of whether established pathways were appropriately resourced
and whether they allowed teams to come to the right decisions about scaling up or shutting down development as quickly and efficiently as possible. Uncovering
these hidden innovation pathways is a necessary
first step to unlocking the latent value already lying dormant in each organization.
The above example highlights an informal, somewhat organic approach to innovation that produced great results. However, these mechanisms just as often lead to wasted time and resources and can be difficult to manage, replicate and scale. In this case, the developer made a choice to go underground with the early stages of the development process. While this story had a happy ending, innovations that are conceived and executed via informal means are far less likely to deliver successful outcomes.
It should not have taken an underground pathway or a chance encounter with the chairman to ensure the idea was developed. This pathway might be strengthened by creating opportunities for personal projects to get airtime in front of senior leaders.
Consider the case of an insurance company we worked with that had reached its top-tier market position, in
part, by introducing a number of industry-shaping innovations over the years. One of these was an early mobile app that enabled policy shoppers to interact via their phone with a sophisticated virtual agent powered
by artificial intelligence.
This project started when a junior information technology (IT) developer, whose outside hobby was creating gaming apps, decided to spend time experimenting with a mobile agent app as a personal challenge. After developing a prototype, he shared the result with his manager, who was enthusiastic about the idea and encouraged him to continue. Shortly thereafter, the company chairman visited their department, where he was shown a demo. The chairman was so impressed he pushed for it to be resourced with a project team, and from there, it followed the formal product development process. While the idea went through a series of well-defined stages all the way to launch, its genesis and early development were the product of chance rather than established process.
Scroll on to see how this particular innovation fits into the UIP framework.
BY DAVID S. DUNCAN AND ALASDAIR TROTTER
Uncovering Hidden Pathways to Unleash Organizational
Innovation Potential
BY DAVID S. DUNCAN, RYAN MCPHERSON AND ALASDAIR TROTTER
Organizational Resilience