One of the biggest problems that a product manager encounters when starting an innovation program or project is to reach consensus on the definition of innovation. This is more than a semantics issue. Without agreement on exactly what the goal is - the team is unlikely to achieve it. In this introduction to the “Beyond Stage-Gate” series we will discuss A new definition of innovation that applies not just to products but to services, business models or business processes How to relate innovation and value Why being new is not enough for something to be called innovative What is necessary to define the innovation as incremental, radical or disruptive How different types of innovations must be managed differently within the development process.

1. ProductCamp Austin – August 2012
Jose A. Briones, Ph.D.
@Brioneja

2. • In this introduction to the Beyond Stage Gate series
we describe how the proper definition of innovation
and the use of the right management process
increases the probability of successful new product
and service introductions
Twitter: @Brioneja
www.Brioneja.com

3. •
1 • How do you or your company define innovation?
• Has this definition changed in the past few years?
2
•
• How do you define invention?
3
•
• Do you believe that invention is equivalent
4 to innovation?
• Do you believe that innovations can be classified
5 or segmented and if so how?
3

4. • How do you or your company define value?
6
• How do you relate innovation and value?
7
• What management system or process do you or your company
8 use to manage the development of innovation?
• Is your current innovation development process adequate for
9 your needs?
• How would you improve your current innovation development
10 process?
• Do you believe that different types of innovation need different
11 management processes?
Twitter: @Brioneja
www.Brioneja.com

5. Legalese
• Stage-Gate® is a registered trademark from Stage-Gate
International’s Product Development Institute Inc.
• “The fair use of a copyrighted work, including such use
by reproduction in copies or phonorecords or by any
other means specified by that section, for purposes such
as criticism, comment, news reporting, teaching
(including multiple copies for classroom use),
scholarship, or research, is not an infringement of
copyright” - Copyright Act of 1976, 17 U.S.C. § 107
5

6. Problem
Product innovation has been described as
the way out of today’s difficult business
environment.
The rate of success of development
projects, in particular disruptive innovation
projects remains too low.
We believe that a reason for the low
success rate is the erroneous application of
analysis and management methods
designed for incremental innovation to
projects with high levels of uncertainty
Twitter: @Brioneja
www.Brioneja.com

7. Problem
One of the biggest problems that a
product manager encounters when
starting an innovation program is to
reach consensus on the definition of
innovation.
This is more than a semantics issue.
Without agreement on exactly what
the goal is the team is unlikely to
achieve it.
Many companies suffering from
innovation fatigue, driven by
confusion between innovation &
invention
7

8. Twitter: @Brioneja
www.Brioneja.com

9. • “So Mr. Sullivan why don’t you tell me what you think is
going on here, and please speak as you might to a young
child or a golden retriever, I didn’t get here on my brains I
can assure you of that”
• John Tuld, CEO of the fictional Wall Street financial firm in the
2011 movie Margin Call
Twitter: @Brioneja
www.Brioneja.com

10. • The traditional definition of innovation has been simply “a
new method, idea or product”.
• We believe that this definition of innovation is obsolete,
and that being new is not enough for something to be
called innovative.
Twitter: @Brioneja
www.Brioneja.com

11. • “An invention is a new (previously undiscovered)
method, device, process, algorithm, or tangible
material that can be used for a specific purpose”
Twitter: @Brioneja
www.Brioneja.com

12. • Classical definitions of innovation and invention overlap
each other!!
• We must establish the difference between innovation and
invention.
Twitter: @Brioneja
www.Brioneja.com

13. Twitter: @Brioneja
www.Brioneja.com

14. • There's nothing wrong w/continuing path of incremental
innovation –
• Must improve product features to keep up with competition
• Issue when continuing to add features –
• 1. Increases cost of product: power users ask for additional
features
• 2. Too complex
Twitter: @Brioneja
www.Brioneja.com

15. • Incremental or sustaining
• Occurs in linear fashion
Product Product Product
1 2 3
• Radical or disruptive
• Occurs in non-linear, discontinuous or
iterative fashion
Projects Product
Twitter: @Brioneja
www.Brioneja.com

16. Maslow's hierarchy of needs
Twitter: @Brioneja
www.Brioneja.com

17. A measure of
• The magnitude an unmet
need is met
• Desirability
The degree by which a product
or service meets a need either
functional, pragmatic or
psychological
Magnitude of value in
marketplace tied to segment –
essential
Twitter: @Brioneja Twitter: @Brioneja
www.spyrotek.com

18. • “Big new ideas more often
result from recycling and
combining old ideas than
from eureka moments”
@stevenbjohnson
Twitter: @Brioneja
www.Brioneja.com
www.Brioneja.com
Twitter: @Brioneja

19. • We propose a definition of innovation as the intersection
of invention and value.
• The magnitude of incremental value that the invention
brings to the user or market subsequently defines the
innovation further as incremental, radical or disruptive.
Twitter: @Brioneja
www.Brioneja.com

20. Incremental or Radical or
Disruptive
Sustaining Breakthrough
Innovation
innovation innovation
• Marginal • Order of magnitude • Delivers value
improvements improvement or along a different
along current increase in benefits feature set not
feature set. along the same prioritized by the
• Product line features existing offering
extensions: Bigger, • Digital vs. Analog and user base
better, faster. technology: • Results in an order
Plasma vs. CRT of magnitude
TV’s increase in rate of
adoption or change
in user behavior
• Features vs.
Design - iPhone
Twitter: @Brioneja
www.Brioneja.com

21. Twitter: @Brioneja
www.Brioneja.com

22. Vs
Twitter: @Brioneja
www.Brioneja.com

23. Twitter: @Brioneja
www.Brioneja.com

24. Twitter: @Brioneja
www.Brioneja.com

25. Value and Innovation
Innovation exists at the
intersection of invention and
value
If your new
product/invention/service does
not offer value, it is just novel -
not innovative.
Your new offering must deliver
value Meet an unmet need
Innovation is not a measure of
the change you make. It is a
measure of the need you
address
Twitter: @Brioneja
www.Brioneja.com

26. • This definition applies not just to products
but to services, business models or
business processes.
• The implications of this definition are that
different types of innovations must be
managed differently in the development
process
Twitter: @Brioneja
www.Brioneja.com

27. • Standard processes for innovation management reflect the linearity
of incremental innovation
• Stage Gate
• Waterfall
Stage 1 • Discovery
• Business
Stage 2 Case
Stage 3 •Development
• Do not work well in disruptive or radical innovation
Twitter: @Brioneja
www.Brioneja.com

28. “The Stage-Gate system is not suited to the task of
assessing innovations whose purpose is to build new
growth businesses, but most companies continue to
follow it simply because they see no alternative”
Clayton M. Christensen
28

29. Classical
Business Disruptive
Manageme Innovation
nt
Efficien
cy Iterative
Forecas Estimat
t es
Progres
s Flexibilit
Measure y
ment
Resourc
e Virtual
allocatio teams
n
Twitter: @Brioneja
www.Brioneja.com

30. • For Disruptive innovations, 1 round of VOC’s is not
enough to be the cornerstone of a project
• Customers cannot say that they want what they do not know
• Customers can only provide feedback on incremental
modifications on what they do know
• Iterations are needed where customers evaluate a prototype and a
new cycle starts, complete with a new VOC, market and business
analysis
30

31. Project Portfolio Classification
1 By Uncertainty
Spiral Approach to Innovation
2 Management
Use Of Different Tools At Each
3 Level Of The Spiral
Twitter: @Brioneja
www.Brioneja.com

32. High Positioning Options
Stepping • Projects are
Stones
Technical Uncertainty
classified by
how much we
Medium Platform Launches
do NOT know
Scouting • Degree of
Options uncertainty
Enhancement defines the
Low Launches track they take
Low Medium High
Market Uncertainty
Twitter: @Brioneja Source: The Entrepreneurial Mindset

33. • Analysis iterated Level 1
• Different Tools
Selected Level 2
• Level 1 tools feed
subsequent levels Level 3
• WHEN Vs. WHICH
Twitter: @Brioneja
www.Brioneja.com

34. The SpyroTek™ Method for Innovation Management
Resources
Launch
Quadrant IV Quadrant I
Roadmap/Timeline
Level Idea
Generation
Risk Analysis 3
2 VOC
Customer
Testing 1
Time Time
Technology
Supply Chain Assessment
Analysis
Business
Value in Use Case
Analysis Regulatory
Quadrant III Prototype IP Strategy Quadrant II
Development Resources
Twitter: @Brioneja
www.Brioneja.com

35. • We have proposed a new definition of
innovation that directly relates it to value
• Different types of innovation correlate to the
magnitude of value delivered
• This definition underpins the need to use
different management approaches beyond
classical waterfall or Stage Gate depending
of the type of innovation outcome desired
Twitter: @Brioneja
www.Brioneja.com

36. Twitter: @Brioneja
www.Brioneja.com

37. • Jose A. Briones, Ph.D. (Brioneja)
• Twitter: @Brioneja
• Brioneja@spyrotek.com
• www.Brioneja.com
37