VOL. 129 | NO. 72 | Monday, April 14, 2014
Michael Graber & Jocelyn Atkinson
Backend of Innovation
By MICHAEL GRABER & JOCELYN ATKINSON
Many of the CEOs we talk to tell us that they have more growth ideas than they know what to do with. It seems like there is a universal love affair with generating ideas but less enthusiasm when it comes to figuring out which ideas are the most commercially viable and how to actually implement.
This imbalance causes a backlog of ideas, begging the question: Do too many ideas stall out innovation?
This quandary is rooted in what is known as the “Frontend of Innovation,” which is the idea generation part of the process, and the “Backend of Innovation,” which is the strategy and implementation of these ideas.
Companies with an established innovation program have these two elements in balance. Innovation stalls out when there is a bandwidth issue – either there are no analysts on staff to evaluate each opportunity or there are too few of them and, like the patent officers at the USPTO, they never see the light of day.
As much as we love the creative idea generation process here at the Studio, we are also keenly aware that ideas are a dime a dozen. Extensive market validation is needed to prioritize, incubate and develop the concepts with the most legs. Just like with a startup, market validation means proving (or disproving) feasibility, demand and profitability.
Singular devotees of the Frontend of Innovation hate talking about this reality, it makes their skin crawl. This is because putting these limitations in people’s minds during ideation limits the creative output and perhaps blocks a breakthrough. We agree, but with generative ideation and limited validation it is easy to see how the backlog ensues. Without a quantitative way to gauge ideas, they can all appear equally appealing.
So now, we will give the Backend of Innovation a rare moment in the spotlight. It doesn’t get a lot of airtime because it is the less glamorous workhorse of the innovation process, but without it, innovation suffocates from idea overcrowding. Much like the tired funnel diagram, the Backend sets up a process and framework to assess ideas and eliminate the weakest from the development pipeline.
Market size, consumer insights, competitive pressure, business model and return on investment are just the beginning of the factors that should be assessed before moving the concept forward to pilot.
Figure out what other factors are critical go/no-go stage gates for your organization to narrow the funnel. The basic questions are: How big is the market? What is the competitive pressure and does this represent a better alternative? Does the end user want and accept this solution? What is the business model and operational factors involved?
Strive for the intersection of generative and lucrative. As with many things in life, the key is balance and moderation.
Jocelyn Atkinson and Michael Graber run the Southern Growth Studio, a strategic growth firm based in Memphis. Visit www.southerngrowthstudio.com to learn more.