As I've said a thousand time, ideas without execution are a hobby and true innovators are not in the hobby business. True competitive advantage comes from those that can take an idea and turn it into a real innovation that has impact. Innovation execution is a core ability that organization must build and support if they are to win the creative economy.
Key components of an innovation execution approach
- Gated funding model
- Gated milestone management
Gated Funding Model
- Limit funding until key deliverables are met
- Recognize that not all ideas will result in products. Manage the budget to ensure there are ample funds to see the best ideas through the innovation pipeline
Gated Milestone Management
- Setup gates that answer key questions/challenges in translating the idea to a product/service
- I use four gates .. you should setup gates that make sense to your team/project/organization
- Market Valuation (e.g. how many customers have the problem being solved?)
- Customer Validation (e.g. Do customers agree that the solution address the problem? Will they pay for the solution? Does the business case justify the investment?)
- Limited Trial/Test Market (e.g. Will the customer actually purchase the solution? Does the business case/value chain hold up?)
- How are gates milestone charts created? (Sample)
- Define the groups/teams (e.g. engineering, marketing, sales, etc) needed to translate the idea into a product/service
- Setup “swim lanes” for each group/team vertically along the left side
- For each swim lane, setup the timeline of the deliverable
- Define the gates vertically across the timeline
- A gate is defined as: “all deliverables to the left of the gate must be completed to satisfy the exit criteria”
How do you setup the Killer Innovation Execution approach?
- Define the gates you will use to manage your innovation programs
- Define the key questions that need to be answered? (e.g. Is the market big enough?). These will be the gates.
- Define the exit criteria for each gate.
- Make the criteria as objective as possible (e.g. Must have a total addressable market of $x with a sustainable margin of y%, etc.)
- Define the deliverables the would be needed to answer each question and satisfy the exit criteria for each gate
- Break-down the deliverables by the groups/teams
- Setup the gate milestone chart (see above)
- Break-down the funding by gates. Project out the full project funding need and then revise the outer gates as you gather more information.
Managing the innovation execution …
- Make each gate a “hard” gate with a “time box” (date when the gate will be completed)
- Have the teams perform “gate reviews” at each gate.
- Review the gate and its deliverables
- Status against the exit criteria
- Walk through findings and insights learned during the gate
- Status against funding
- Define deliverables and exit criteria for next gate
- Update funding for next gate and total funding requirement
- Ask for “go” or “no go” approval to move forward
Sample Gate Milestone Chart – PDF Version (License: CC – Non-commercial, Attribution)