Describe the innovation funnel
Theoretical concept:
Project Portfolio Planning:
- can be conflicing problems like canibalizing projects
Execution:
- Launch the project
Learning:
- Like Problem management - lessons learned
Describe the ideal of managed processes
Pre-Development investigations:
- Ideas as input
Development project:
- Bring ideas to life
Introduce products:
- Output
Why is the reality different from the ideal innovation process?
- Source of ideas is uncertain
- Pet projects of senior management
- A lot of hot air at the end, few projects drip out into the market
- “Product Filter”: like only ideas that fit to the company
- Senior management highly involved or needed for success
- Marketing inputs vs. department changes
Describe the R&D interactions with the environment
Inbound: (Technology acquisition / sourcing strategies)
- Internal R&D
- Acquisition of innovative firms
- Joint ventures
- Technology purchasing
- Technology scanning
Middle: Technology base (capabilities)
Outbound: Technology exploition strategies
- Internal exploitation (production and or marketing)
- Creation of innovative firms (units) internaly
- Joint ventures
- Divestment
- Technology selling (licensing)
- Storage, loss and leakages
Explain the funnel and its dependencies to its soroundings
Open innovation:
- Internal technology base:
- Might get out as a spin out, divest or licesing to other relevant markets
- Internal / External venture handling
- External technology base:
- Might come in as technology insourcing
Final target is the companies market
Show open innovation on a concrete example
P&G:
- Large investement in R&D but frustrated by Not invented here syndrom
- shift from R&D to connect & development (open innovation)
- Aim of getting 50% of innovation from external sorces achieved through:
- InnovationNet
- Technology Entrepreneur Networks
- Global technology council
- IP regimes
- Aim of getting 50% of innovation from external sorces achieved through:
Explain the stage gate process (Cooper)
- Each stage is also a possible exit point
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What is the key “homework” stage in the stage gate process?
- Build business case:
- User-needs-and-wants study
- Competetive analysis
- Market analysis
- Detailed technical assessment
- Manufacturing assessment
- Concept testing
- Detailed business & financial analysis
- Develop business case:
- Product definition
- Project justification
- Project plans
What is the link of the stage-gate to portfolio Management?
Between Scoping and Build Business Case: Second Screen:
- All Projects are up for auction
- Must dos are identified
- The rest are force ranked on criteria / priorization
- Resources are allocated
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Pros and cons of stage-gate processes?
Good: Popular, widely used tool. Sharpens decision marking
Bad:
- R&D is often political, process can be “hijacked”
- Choice of criteria determines throughput, required hard work
- More haste, less speed: goal should be succesful product intruduction
- Tyranny of the process: Goal is product not process
- Not flexible / agile
- Right incentives are critical: reward system needs to support hevaiour
Summary of stage-gate process
- Stage-gate processes help to guide the new product development process
- Ideally, they are very structured, moving in the direction of marketable products and integrate the project, portfolio and strategy levels (as is proposed in the development funnel)
- In practice, caveats need to be avoided when using stage-gate processes in firms
- Higher-generation new product processes are fluid (overlapping stages), have fuzzy gates, are focused (in that they look at the whole project portfolio, rather than one project at a time) and flexible (each project has its own route through the general stage-gate process)
Question to You
Which criteria do you think matter most in the stage-gate process?
Why?
Who do you need to make decisions at the different gates? Why?
- customers voice
homework stage
strategic fit
financial criteria - Senior Management
Project leader
Resource owner
Technical versus customer attributes
- An orientation towards customer needs must not be taken for granted even (especially?)
in large, established companies!
Quality Function Deployment (QFD)
- is a systematic method to link customers‘ quality requirements to technical product features
- aims a developing products and services that fulfill customers‘ needs
- uses tables and graphs for that purpose
- concerns both internal and external interfaces of the company
- extends responsibility for product quality to all departments of the company
Explain Quality Function Deployment (QFD) on a concrete example?
- Step 1: Determine relevant customer attributes (CAs). What does the customer want?
- Survey or observation of customers
- Identification of relevant CAs
- Aggregation of CAs to bundles by project teams
- Phrasing in the customer’s own words (even if interpretation might be difficult)
- Step 2: Determine the relative-importance weights
- Step 3: Customers’ evaluation of competitive products
- Step 4: Technical realization of customer attributes
- How can desired product features / changes be realized?
- Customer: “what?” vs. Engineer: “how?”
- Top of the House of Quality:
- Engineering Characteristics (ECs) that affect CAs
- Dimensions of measurement need to be determined
- Helpful: use of creativity and moderation techniques
- Step 5: Relationship matrix shows how engineering decisions affect customer perceptions
- Step 6: Objective measures to evaluate competitive products
- Step 7: Roof matrix to show interactions between ECs
- Step 8: Estimates of cost and technical difficulty complete the HoQ
Summary QFD
- QFD concerns both internal and external interface management
- Tables and graphs are used to link customer requirements (CAs) to technical product features (ECs)
- Tool: “House of Quality“
- The HoQ does not have fixed rules, but should be adapted to the respective needs
Likely failures in the PSI process
- Do not meet user needs
- Not sufficiently differentiated from products of competitors Do not meet technical specifications
- Too highly priced for perceived value
- Too late to market
- Do not comply with regulatory requirements
- Compete with the company’s other products and services Lack strategic alignment with the business portfolio
How do you measure performance in PSI?
Productivity
– Resources committed against new products over time
Speed to market
– The time taken between the start of a project and its commercialization
Flexibility
– Elapsed time between concept freeze and market introduction
Quality
– The degree of fit between the PSI quality function and the actual quality
achieved
Overall fit
– The relationship between the PSI outcome with the goals in the strategy and feedback from the market
Chapter Wrap up
Productivity
– Resources committed against new products over time
Speed to market
– The time taken between the start of a project and its commercialization
Flexibility
– Elapsed time between concept freeze and market introduction
Quality
– The degree of fit between the PSI quality function and the actual quality
achieved
Overall fit
– The relationship between the PSI outcome with the goals in the strategy and feedback from the market
