3. P&S Innovation process

3. P&S Innovation process

1. Relevance of efficient innovation process

   • Idea & assessment (0,02-1,4%)
   • Concept test (0,2-5,6%)
   • Product development (3-29,3%)
   • Market test (9-16,9%)
   • Production start & launch (88-47%)

2. Formal innovation process models

   • Principles
     • Orientation for all org. members what to do
     • Systematic process to reduce uncertainty
     • Completeness of all activities for each phase
     • Early elimination of bad projects
     • Efficient application of scarce resources
     • Shortening of time to market
     • Radical innovations might need different approach
   • State-gate process of Cooper
     • G1. Initial screening
     • S1. Preliminary assessment
     • G2.Second screening
     • S2. Detailed investigation
     • G3. Decision on BC
     • S3. Development
     • G4. Post Dev. review
     • S4. Testing/validation
     • G5. Pre-commercialisation Business. analysis
     • S5. Commercialization
     • Post-implementation review

3. 'Gates' - selection of innovation projects

   • Steering committee
     • Principles
       • Deciding about project selection
       • Controls innovation process from portfolio perspective
     • Requirements of members
       • Knowledge about firms strategies and objectives
       • Overview about firm resources
       • Knowledge about cooperation partners and competitors
     • Relevant org. mebers
       • CEO (recognize limited resources)
       • Tech & Market guy
       • Economic & Financial guy
       • Legal guy
   • Evaluation criteria
     • Strategy
       • Contribution to goals
       • Strategic fit
       • Strategic impacts
     • Customer and market
       • Perceived product advantage
       • Market volume and growth
       • Potential and market creation
     • Competition
       • Competitive advantage
       • Patent
       • Positioning
     • Internal resources
       • Technological capabilities
       • Manufacturing on existing plants
       • Synergy with existing sales
     • Risk
       • Technical feasibility
       • Market feasibility
       • Synergies with existing sales
     • Financials
       • Revenue
       • Margin
       • Risk/Return

4. Innovation portfolio management

   • Principles
     • Allocate R&D resources in strategic buckets
       • Degree of innovation
       • Basic/applied research
       • Markets
       • Technologies
       • Product lines
       • Example
         • Basic research (25%)
         • Improvements (20%)
         • Incremental innovation (30%)
         • Radical innovation (25%)
     • First define strategic focus
     • Project rating is used
   • Objectives
     • Balanced project landscape
     • Protection of R&D resources
     • Risk reduction