Product innovation has been described as the way out of today’s difficult business environment. However, the rate of success of development projects, in particular white space or disruptive innovation projects remains too low.
We believe that a reason for the low success rate is the erroneous application of methods designed for incremental innovation like Stage Gate to projects with high levels of uncertainty. In this presentation we will discuss the different types of development projects based on degree of uncertainty, and the creation of different project tracks. Projects are managed using different tool sets based on the best fit between information available and decision making needs.
The Path to Product Excellence: Avoiding Common Pitfalls and Enhancing Commun...
A New Framework for Disruptive Innovation Management 2012 - Dr. Jose a. Briones
1. Beyond Stage-Gate®:A New Approach to Manage Radical and Disruptive Innovation
Projectsin an Environment of High Uncertainty
Jose A. Briones, Ph.D.
SpyroTek Performance Solutions, Dallas, TX
Summary
Product innovation has been described as the way out of today’s difficult business
environment. However, the rate of success of development projects, in particular white space
and disruptive innovation projects, remains low.
This low success rate can be attributedin partto the erroneous application of methods designed
for incremental innovation to projects with high levels of uncertainty. Common approaches to
the management of innovation projects, like Waterfall or Stage-Gate, follow a linear approach
that does not provide the flexibility needed for disruptive innovation to be successful.
The key to success in disruptive innovation is the use of a strategy that reconciles opposite
needs: flexibility and control. A framework of controlled iteration can provide the right level of
flexibility while at the same time give management the information required for proper
allocation of resources.
The need for new approaches to the management of innovation projectsled to the
development of the SpyroTek System. This method applies a true spiral approach to market and
business development. In addition, development projects are classified based on degree of
uncertainty and managed along different project tracks. Finally, different tool sets are used
based on the best fit between information available and decision making needs.
The SpyroTek System preserves the metrics needed for measurement of project progress, but
also provides the flexibility needed for high uncertainty innovation projects to succeed.
SpyroTek Performance Solutions @Brioneja
2. Problem Statement
Recent examples such as Blockbuster, Borders, Kodak, Nokia and Blackberry show that
innovation has become a matter of life and death for companies today. But innovation may be
costly.
Dr. William Strauss of FutureMetrics has documented that the ratio of R&D needed per unit of
GDP output has gone from 1:1 in the early 90’s to ~3:1 in 2009. This increase can be attributed
to the fact that the rate of success of innovation projects, particularly radical or new market
innovation projectsrarely exceeds 20% and may be as low as 2.5%.
Referring to classical innovation management processes such as Stage Gate, Clayton
Christensen, author of the book “The Innovator’s Dilemma”, has stated:
“The Stage-Gate system assumes that the proposed strategy is the
right strategy; the problem is that except in the case of incremental
innovations, the right strategy cannot be completely known in
advance. 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.”
Christensen's observation reflects the need for new management approaches that increase the
probability of success, but at the same time preserve the metrics required for measurement of
progress and resource allocation. The challenge is then to reconcile a formal management
framework with the flexibility that is needed for innovation to thrive.
The Need for Iterations:
To develop disruptive innovations, 1 round of voice of the customer is not enough to be the
cornerstone of a project. This is because customers cannot say that they want what they do
not know, and can only provide feedback on incremental modifications on what they do know
The SpyroTekSolution
The solution to this challenge consists of3 parts:
1. Classifying projects according to the degree of uncertainty
2. Adopting a controlled iterative process to discovery
3. Using the right analysis tools that correspond to the level of uncertainty
at each level of the spiral
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3. The practical framework that incorporates these solutions is show in Figure 1 below.
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
Time is the X axis, resources is the Y axis. Center = 0 for both, thus they both grow from the center. This is visual
way to indicate that time and resources allocated should be low for level 1 projects and grow as more information is
obtained and uncertainty is reduced.
Keys to the Process:
Time and resources start small, increase as the project advances through the
spiral
The analysis is repeated at each level, but the tools used for each level are
different.
o Level 1 uses tools more suitable for high levels of uncertainty, i.e.
Discovery Driven Planning, Probabilistic Decision Analysis
o Level 3 uses more conventional management tools, i.e. Linear Stage-
Gate, Agile, NPV
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4. Benefits of the Spiral Approach:
The use of this framework offers the following advantages compared to traditional linear
innovation management systems:
• For disruptive innovation projects iterations are needed where customers evaluate a
prototype and a new cycle starts, complete with a new VOC, market and business
analysis. This framework allows for the iterations to occur in a controlled manner;
• The use of this framework, combined with the right analysis tools, allows for effective
financial forecasting even in the early stages of the innovation project where
uncertainty is high.
• The initial iterations, where uncertainty and risk are high (represented by the inner
spirals on the chart) can be completed quickly and at low cost. Ideas can be rapidly
promoted to the next iteration – or discarded.
• The controlled iteration approach provides a way to properly define the right value for
the product or offering, leading to more accurate price estimates.
• In this framework, allocation of time and resources starts at low levels. These increase
as the levels go up and the uncertainty is reduced, thus minimizing risk.
• This approach does not compare incremental innovation projects to radical innovation
projects in the early stages, a classical mistake made by established leaders which
results in the early kill of radical innovation projects.
This framework for the management of innovation projects provides the flexibility needed for
successful innovation projects in any industry and the metrics needed for proper measurement
of progress and resource allocation.By utilizing this approach, managers insure that radical and
disruptive innovation projects have a chance to prove their benefits and create the innovative
products and services that companies need to remain competitive.
This methodhas been used to successfully introduce a disruptive innovation product to the
construction additives market in Europe, and has been presented at numerous conferences and
webinars to very positive reviews
Resources
A short video that summarizes the Beyond Stage Gate framework for innovation
http://www.slideshare.net/Brioneja/a-new-approach-to-innovation-managment
“Beyond Stage Gate” Framework Presentation
http://www.slideshare.net/Brioneja/brioneja-beyond-stagegate-a-new-approach-for-innovation
Stage-Gate® is a registered trademark from Stage-Gate International’s Product Development Institute Inc.
SpyroTek Performance Solutions @Brioneja
5. Bio
Dr. Jose A. Briones is currently the Director of Operations of SpyroTek Performance Solutions, a supplier
of innovation management and support services. Dr. Briones also holds managerial and board positions
in the following companies: SPOTSTracking Systems, a developer of workflow management and order
tracking software for small businesses, Smarty-Ears LLC, a developer of iPhone Apps for Speech Therapy
applications, Green Chemistries Corp., a supplier of hypoallergenic Natural Rubber, and Celeritas
Chemicals, a supplier of specialty chemicals for the Oil and Gas industry. He is also an Advisory Board
Member of the DFW Product Group.
Dr. Briones has 20 years of commercial and technical experience in the manufacturing and technology
industries, holding positions in the areas of marketing, innovation, sales, engineering and R&D with
Fortune 300 companies such as Celanese, Air Products and Reichhold. His experience also includes
management of custom manufacturing companies and software startups. Dr. Briones has been the
commercial or technical leader in the launch and commercialization of over 35 new products for a
variety of applications and end use segments. He has been named as inventor in 6 different patents.
Dr. Briones has a Ph.D. in Chemical Engineering from Clemson University and has an Executive MBA
from Wharton Business School. His expertise and experience includes: Innovation Management,
Product Development and Ideation, Business Model Assessments, Product Portfolio Value Analysis,
Probabilistic Forecasting Decision Analysis and use of Social Media to achieve Social Change.
Recent Publications
“A New Approach to Innovation Management”. Video submission to semifinals stage of
Wharton/Wipro Innovation Tournament. 2011
“My Boss Told Me to Get the Voice of the Customer, Now What?” Presentation at ProductCamp
Austin – 2011
“Quantifying Uncertainty in Innovation Project Management” Presentation at 2010 Risk Conference,
Applications and Training - 2010
“Beyond Stage-Gate – A New Approach to Innovation Management”. Presentation at ProductCamp
Austin – 2010
“Value in Use Analysis and Strategy for Product Introductions” – Presentation at Product Camp
Austin - 2010
Recent Patents
Additive composition for mortars, cements and joint compounds - Dec. 2009
Methods for incorporating polyvinyl alcohol particles into products – Jun 2009
Contact Information
Brioneja@SpyroTek.com
SpyroTek Performance Solutions @Brioneja