How an ‘Innovation Culture’ was designed in our Company

The more mature a company becomes, the more likely it finds itself in the position of seeking ways to come up and develop new ideas. In contrast to the hype we often see in today’s media, ideas, inventions and opportunities are not solely the domain of Silicon Valley startups, that’s for sure.

Whether it’s Bell Labs, NExT or more recently, Google X, all have one thing in common, they collected and developed new ideas and transformed them into products or services. What the ideas of those labs have in common is that they had to undergo a variety of steps and processes before they became a viable product.

As an interesting side note, products invented by the mentioned companies might neither have survived eventually, nor have they (necessarily) become a sustainable success, despite all the effort.

Shaping a Culture — Image by Markus Spiske

Just think of Google Glass, a great idea that combined glasses as we wear them today, with the secret sauce of augmented reality (AR) to help the wearing person to translate text “on the go” or use navigation without the distraction of looking at a phone. Honestly, the Google Glass prototype was not the most attractive accessory you could get, but even worse, the incorporated camera module soon created tensions among the people around the wearer of the glasses (e.g. in public places), who did not want (or consent) to be filmed by the device. If you are interested in more context, just google “Glasshole”. Coming back to my previous statement about success and other companies taking advantage of one’s progress, rumors say that Apple is currently working on a (possibly) more advanced and better looking variant of this kind of gadget, maybe now the time is right. (An update to this: If you’re a smart-gadget geek, you can already buy Meta/Ray-Ban smart sunglasses)

Enough of glasses. Why was this talk about glasses even important to the idea of a corporate innovation culture? This story teaches us a couple of interesting lessons, all at once:

1. Even the huge, successful Silicon Valley giants fail
2. Be brave, try new things
3. Build new products (and, if possible, try to do it at the right time)
4. Evaluate benefits for all parties
5. Establish acceptance in the market, don’t be a Glasshole!

This post will not provide great ideas how you could invent a new product, but it will provide some ideas how to create a proper set up in your company to enable and deal with innovative ideas in a more aligned way.

My co-workers and I were given quite some time to solely focus on the question of how to establish means that allow the recording and evaluation of ideas and further guide them through various channels, in order to obtain a product that can be brought into the market. Literature is everything but sparse, there are both, methodology and software that allow companies to pin down ideas in a structured way — the key take away here is, to settle with a methodology that seems most suitable for the company. One size does not fit all.

Stage-Gate-Model © (SGM)

Let me be honest with you, I do not like processes for the sake of processes — and SGM really felt like this when I looked at it the first time — but imagine the following:

You come up with an idea of a new product, the Advanced Analytics Tool, of which you are sure that it will be a great success for the company.

1. Who do you present the idea to?
2. How does your idea align with the company’s strategy? Or even better, why should the company pursue your idea, although it is not inline with the strategy?
3. How to evaluate its chances of success?
4. How to evaluate and compare this idea?
5. How / When to evaluate the technical feasibility of your idea?
6. When will this idea create benefit to the company? Do we see synergies among existing services/products?

Very soon, I found myself in the position where I simply did not know how to address this question in a way that satisfies the minimum standard of corporate transparency — I could not just approach an arbitrary business developer, one of the product managers and a (notoriously engaged and involved) developer of my choice to see my idea eventually go south — this simply cannot be justified, neither with regard to time, nor to money.

Basically, our goal is to collect all the ideas we came up with and find a way to get them down to a smaller number, a subset, of potential products or services. Let me copy this from our “whiteboard”:

Transforming ideas into products and services — Image by Author

So when does SGM comes into play? Right here. Essentially, you are establishing a short process that covers stages (like conception of an idea) and gates (if your idea is not able to pass a gate, it simply will not proceed to the next stage — this is where your idea gets knocked out).

If you are looking up the English explanation for this process (try Wikipedia), you will likely find the rather old idea of “Water Fall Process” in software development — this is not quite what we are talking about here. In the light of innovation and product development, SGM is an idea that guides you through several steps in order to develop and improve an idea. And since you’re asking, yes, Stage Gate Model is a registered trademark.

How we organized our SGM from Concept to Benefit — Image by Author

We carefully thought about stages every idea has to undergo before being submitted. This has several advantages: The idea must, at any stage, suffice the required level of detail, otherwise the idea cannot pass the related next gate, hence will not arrive at the next stage.

Additionally, when being processed at a gate, the idea will be automatically passed to the the responsible staff, hence the submitter does not have to care for “who to submit the idea to” any more.

Another key advantage of the SGM is that feedback is collected in a structured and consistent way. This allows the submitter to understand and follow the decisions made by the “gate keepers”.

What steps did we specify to implement our SGM?

1. Conception

This is probably the most important stage of all, because if the idea is not drafted well enough, you won’t be able to convince anyone of a potential success.

There are many starting points, a more conventional, yet proven concept is a value proposition canvas. This may look like a 4 year old’s drawing, but should cover the most essential facts why your idea is solving problems.

Steve Jobs knew it, Jeff Bezos has built a company around it: Solving customers’ needs. No, this is not an “introduction to marketing” class, still, if your canvas is not even able to answer these first simple questions, your idea may never find a way to create benefit — and is certainly not justified to proceed in our idea development process.

Main components of a VPC — Image by Author

Having outlined the idea and provided the main components of the VPC will allow the idea to be evaluated to a dedicated first gate (which consists of several employees). Of course, if you already got more details you could provide, do so! We could learn that submitted ideas including (among others)

• Technical limitations
• Internal Capabilities
• Competitive Analysis

do have a much higher chance to really show some sort of uniqueness that makes the gate keepers feel quite comfortable to let the idea pass — while the decision is only based on provided facts and no other assumptions! Passing this gate will guide you to:

2. Pitch and Evaluation

The previous gate only assures that all relevant details are provided, this stage really is about pitching and rating the idea.

The submitter — or any other person that may have an interest in the idea — will then pitch the idea to a selected group of people. Make sure that this group does not only consist of the CEO and friends, the more mixed the better. In our groups, we involved several different positions coming from different departments in the company. And to point it out again, the more different the views, the better.

Further, make sure your pitch nails down the idea to the point, you will not benefit from a one hour meeting. We set this to a 5 minute maximum — or think of it as an elevator pitch, that makes the presentation even shorter.

Evaluate the idea — Image by Author

As already mentioned, there should be a consistent way to rank an idea. We developed a rather simple, but (as I believe) efficient scoring system. The purpose of this system is to quickly filter out ideas that do not fit into our company’s vision, e.g. if the idea is brilliant, we still will not do it, if it is related to the defense industry.

Gate keepers at this stage/gate will be entitled to come up with some sort of veto, in case there are aspects that are unclear.

3. Validation

This is crucial, at this stage we verify that all the assumptions and considerations with regard to e.g. knowledge, available resources, really hold. Keep in mind, having done all this pitching and proposing, you might have gone a little off, to what you initially suggested.

Validation stage makes sure that all relevant departments (yes, we specified a responsible person for each business unit), dealt with the idea and came up with approval, concerns or improvements. The best idea you have, might not be the right idea for your company. If there is no developer capable of creating a block chain, you probably won’t create your own unique cryptocurrency — gosh, 2022 and we’re still talking about Bitcoin.

To make validation more tangible, we narrowed down the validation process to 3 parts:

• Market related: Sales, Business Development, etc.
• Technical: feasibility, resource planning, architecture
• Operational: dependencies, real-world deployment, unexpected costs

Gate keepers at this gate will assure that the given validation assets are properly outlined and aligned with the departments. If a consistent overall picture could be drawn, we are about to leave the whole conceptual and planning steps and proceed with the last two “hands on” stages.

4. Implementation and Testing

This step is very specific to the company, while some operate in a highly agile environment, others will stick to their water fall development style (which is absolutely fine to me).

No matter how your precious piece of software is developed, at the end you will hopefully see the product become alive.

Get the job done — Image by Author

Gates are closely tied to software testing, if the product passes all defined tests, this may be a good sign that your product is soon good to go. Gate keepers will have their focus on the test results and decide whether to product or service is ready for sale or not.

5. Benefit

When reading this post, many may jump directly to this section — you’d better not. Having followed the previous stages and gates, your idea should be in great shape and emerge as a great product or service. Most of the planning work is already done, Sales, Marketing and others have already acted as decision makers or Gate Keepers, for this reason, there is a clear vision throughout the company.

Now it is time to take these plans into action: Marketing and and other department will do their very best to approach customers and enter new markets. In short: at this stage we finalize our efforts and get our product to market.

Is there another gate? No, that’s it from my perspective, BUT make sure you keep track of your business transactions related to the idea. If you’re wondering what that is supposed to mean, we have come up a few ideas:

• Track time and effort that is made for selling
• Identify and monitor traffic around the product/service
• Make sure you record benefits for other products generated by this new one (synergies)

Technical Stack

One last point. You might have wondered how to technologically support the idea of your idea of an SGM? There are endless ways to do so, I will outline a few ideas that may be relevant to you:

• Develop your own tool: If you got talented developers at hand, a quick (first 3 stage) SGM web app, may not require tremendous amount of effort. Keep in mind, that especially the last two steps will be achieved through existing processes/tools — think of Jira or similar tools you might already use.
• Use forms: Forms can be used for several stages and are very easy to set up. This could either be a way according to the above idea, or an independent “tool” created through Google Docs or similar services
• Use existing software (do not necessarily try to entirely wrap the software around the new process, do it the other way around): Use neatly designed Confluence templates, simple Jira or Trello tickets to move along swim lanes

Final Thoughts

I hope that this brief post could give you an idea of how you could set up some sort of “innovation process” supporting the creation of new products and services. This is an exciting topic to many companies, of all sizes, and will define towards which direction your company is heading to.

One last remark from an employee perspective: It is more than discouraging to see an idea being rejected without stating proper reasons why. For this reason the above described and implemented procedure keeps proper feedback and comparability in mind and makes decisions tangible, comparable and most importantly, transparent.

I do greatly appreciate this, your employees might do so too.

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Images designed on Canva.com by me