Organiz­a­tions must be-come more agile — but how?

The last article in our series “Navigating Complexity” discusses the question: How might we best translate insights gained through strategic navigation tools into sustainable growth and business success? One key element of an answer is ‘Agile Organiz­a­tions’. But what does this mean for companies? And which paths lead to agility? Which obstacles have to be overcome?

By Dr. Friedhelm Böttcher and Dr. Karl-Michael Schumann

Estab­li­shing Agile Organiz­a­tions

Navigation the VUCA-World uncovers both needs to act and options for action. However, in a VUCA- World only agile companies can act appro­priately. True agility of a company goes far beyond agile project management, SCRUM, innovation labs or “agile workplaces”. True agility impli­cates the ability of a company to recognize relevant changes, to initiate strategic change, and to generate sustainable compe­titive advan­tages based on change. This ability requires openness, flexi­bility, the right speed of consi­stent decisions and actions, as well as an unres­trained dispo­sition to shape the future by changing tradi­tio­nally accepted rules.

Although agile companies are stable organiz­a­tions, they adapt their organiz­a­tional struc­tures flexibly to changing condi­tions. They under­stand the world as a process of conti­nuous change and use the resulting challenges as oppor­tu­nities to grow.

This requires decisions to be made by people (as indivi­duals or as part of a team) who are directly confronted with the necessity of this decision, and also those who have the highest compe­tence for assessing the situation [1]. These people must be identified quickly and integrated into the decision processes – a need that rigid hierar­chies are not capable to meet. Agility thus presup­poses a high degree of individual respon­si­bility and self-organiz­ation to form new types of coöpe­ration and patterns of behavior outside of defined struc­tures. Agility of an organiz­ation enables individual abilities and organiz­a­tional functions to be brought together in such a way that efficient, coöpe­rative problem solutions are achieved through joint actions. These principles anchored in the organiz­a­tional culture are more important than fixed rules and prescribed processes [2].

Agility needs to be anchored in operative actions as well as in strategic corporate leadership. It also includes the design and management of the surrounding business ecosystem. Project management and self-organized project teams are the supporting elements of agile companies. They unite different internal and external disci­plines dynami­cally to form task-oriented ‘Power Teams’, which co-create even beyond enter­prise boundaries. These ‘Power Teams’ (as part of agile project management) are charac­te­rized by …

  • almost daily coöpe­ration of subject matter experts and developers during the project,
  • self-organizing teams that plan and execute the project,
  • self-reflecting teams that analyze and optimize their own ways of thinking and acting to progres­sively improve their effec­ti­veness, efficiency, and perfor­mance [3].

Design thinking and knowledge creation as core disci­plines

Agile companies are creative companies in which success takes prece­dence over formal processes and efficiency. Acting in the VUCA world is under­stood as a design process that identifies the need for action and options for action at an early stage, initiates a conti­nuous process of trans­for­mation and “reinvention” and is based on creative knowledge work. Agile design includes all levels of the company, i.e. the repro­duction of the organiz­ation through the develo­pment and adapt­ation of the employee structure, the organiz­a­tional structure, work processes, individual behavior patterns, roles and internal coöpe­rative relati­onships, and also the design of relati­onships to the surrounding business ecosystem.

People and their inter­action, if possible in face-to-face conver­sa­tions, come to the foreground. The company as a whole assumes the respon­si­bility of creating meaning, as well as of providing and supporting an environment that enables motivated indivi­duals to live up to their challenges.

This implies that obstacles to innovation are identified and removed to reduce the workload of Power Teams by better recognizing the relevance and context of task, improve their selection and foster networking.

Estab­li­shing coöpe­rative value creation systems

The trends described earlier are indicators of very real develo­p­ments with far-reaching conse­quences for virtually all branches of industry. They offer companies new growth oppor­tu­nities through offerings and business models that go far beyond the well-known and controlled fields of activity. However, companies will be less and less able to cover on their own all the required fields of compe­tence to capitalize on these oppor­tu­nities. At the same time, they all need to confront a general challenge: They are tradi­tio­nally entangled with the existing logics of their industry and their customers. But now, they have to open up to non-tradi­tional, sometimes alien external innovative triggers and forces in order to close their innovation gaps. It is getting less and less possible to handle the ever faster growing complexity of the tasks of a changing world on one’s own. For example, new business models often integrate service offerings that only different market parti­ci­pants can provide. Manufac­turing and service-oriented companies, software and hardware providers, grow-ups and start-ups, large corpo­ra­tions and medium-sized companies, univer­sities and R&D‑driven companies must coöperate across the boundaries of their industries and sectors. In tradi­tional value chains diffe­ren­tiated companies provide clearly diffe­ren­tiated elements of value. In many cases we see this model disap­pearing: “Solutions in the areas of perfor­mance contracting, demand response and supply chain management are becoming preferred business models for customers. Suppliers must develop service compe­tencies and service capacities in order to operate in the most dynamic market segments and maximize value creation through co-creation. A business model that wants to represent a complete solution for the customer must include the conver­gence of service and solution-based industries” [4].

The ability to act in the VUCA-World demands, in addition to the agility of the company, to develop new models of cross-company coöpe­ration. Today’s common forms of strategic alliances such as share­hol­dings, joint ventures and joint R&D projects are not suffi­ci­ently far-reaching. They do not provide the degree of flexi­bility needed to meet the challenges of the future. The companies’ actions in the market can no longer be reduced to largely static, linear customer-supplier relati­onships or compe­tition. Tradi­tional roles are being replaced by new images and models of colla­bo­ration in which companies see themselves as part of a complex business ecosystem. “A company is no longer to be regarded as a member of a parti­cular industry. Rather, it is part of a business ecosystem that extends across the boundaries of a multitude of industries. Within this system, companies jointly develop compe­tencies and capacities that serve an innovation and group themselves around it: the parti­ci­pants work in coöpe­rative compe­tition to promote new products, satisfy customer needs, and ultimately ring in the next round of innovation … Like its biolo­gical counterpart, a business ecosystem gradually evolves from a random collection of certain components to a more struc­tured colla­bo­rative system. …. Business ecosy­stems condense out of an original, swirling pull of capital, consumer interest and talent that comes from innovation. Just as a successful new species rises from the natural founda­tions of life such as sunlight, water and soil nutrients” [5].

Business ecosy­stems describe in a new way the framework in which companies operate, in which all direct and indirect exchange relati­onships are made clear as inter­con­nected system that mutually define each other. For companies, this results in new design options and a new under­standing of compe­tition and coöpe­ration.

Figure 3: In coöpe­rative value creation systems, the partners provide services for joint customers in mutual coördi­nation.

A parti­cular aspect of business ecosy­stems is the conscious and targeted estab­lishment of coöpe­rative relati­onships between different partners with the aim of generating joint added value. Partners with different compe­tences, roles and interests work together to generate coöpe­rative compe­titive advan­tages through WIN-WIN situa­tions. “The fact that each parti­ci­pating partner contri­butes its specific core compe­tencies … resolves the conflict between a high degree of specia­liz­ation on the one hand and a broader, more diverse range of services on the other. In such an .… ‘Association’, advan­tages of a more flexible distri­bution of tasks and capacity utiliz­ation … can be combined with specia­liz­ation advan­tages at the level of the value-added units” [6].

Management in the VUCA world requires management of complexity on the basis of a few simple principles and rules. Navigation systems, agile organiz­a­tions and coöpe­ration systems form their basis. The greatest challenge today is seems to be the conti­nuous and simul­ta­neous design of new or improved offerings and business models, processes and struc­tures, and the business ecosystem at the level of the “Daily Business”, and of the medium-term oriented “New Business” to the same degree that often is already taking place in the develo­pment of the “Future Business”.

The path to an agile, sustainably growing business organiz­ation in the VUCA world is full of obstacles. It is necessary to implement coöpe­rative value creation systems that go beyond the tradi­tional and today’s forms of coöpe­ration to cope with complex tasks. What does this mean for companies? How can obstacles and challenges be overcome? Please read for example our article “How do we find the way to successful co-operative value creation systems? Your feedback and contri­bution to this important, future-oriented discussion is always welcome on www.futurebizz.de and in the social media.

______________________

List of sources

[1] Weick,K.E.; Sutcliff, K.M.: “Managing the Unexpected”, Wiley, New Jersey 2015, p.115f

[2] Anderson. H.; Uhlig, J.: “The Agile Company”; Campus, Frankfurt 2015, p.16

3] Quoted from Wikipedia https://de.wikipedia.org/wiki/Agile_Softwareentwicklung

4] Frost&Sullivan: “Service Business Models and Chang-ing Compe­titive Landscape for Energy Management”; 9AAF-19, February 2015

[5] Moore, J.F.: “Predators and Prey: A New Ecology of Compe­tition”; Harvard Business Review 1993

6] Bach, N.; Buchholz, W.; Eichler, B.: “Business Models for Value Creation Networks — Conceptual and Conceptual Founda­tions” in Bach, N.; Buchholz, W.; Eichler, B. (Ed.): “Business Models for Value Creation Networks”; ilmedia 2010

Picture credits: Title: iStock; graphic in text: Böttcher Consulting

Framing the Future — Which Instru­ments are at our disposal?

The previous articles in our series “Navigating Complexity” discussed the essence of changes and options for action in our VUCA world. This issue will present instru­ments, which help to make comple­xities and inter­re­la­tions of forces of chances more trans­parent, and thus enable developing powerful frame­works of the future. As a result urgent needs to act, options for action, and new potential areas of growth become more visible based on an advanced under­standing of the mecha­nisms and inter­ac­tions of ongoing change processes.

By Dr. Friedhelm Böttcher and Dr. Karl-Michael Schumann

Strategic Mapping — Orien­tation by Visua­liz­ation

Effective Navigation systems need to make complex inter­re­la­ti­onships trans­parent, and simplify complexity in a way that the essen­tials are quickly recognized and under­stood. At the same time they need to ensure that the relevant and deter­mining links between the key factors are not lost.

In this sense, Strategic Mapping [1] can create compact, visua­lized repre­sen­ta­tions of complex inter­re­la­ti­onships which offer unique oppor­tu­nities. The challenges of creating and managing business growth in a VUCA world have proven Trend Maps and Innovation Maps to be parti­cu­larly useful.

Trend Maps visualize a landscape of trends and counter-trends that are partly already effective and partly still to come, and which might transform entire industries and business sectors. By displaying the develo­pment of these trends along a time axis, it is possible to predict when certain trends will likely become percep­tible and by when they will have reached their maximum effect. Practi­tioners of Trend Maps can draw conclu­sions about which trans­for­ma­tional develo­p­ments might affect their company and industry and initiate measures in good time.

Our Trend Maps are based on simple trend catalogues, which are regularly updated via surveys and workshops among the wider community of our cross-industry network “future_bizz”. They are subse­quently adapted and optimized to match the parti­cular needs of individual companies.

Figure 1: The landscape of the future presented by a Trend Map provides oppor­tu­nities for predicting trans­for­mative develo­p­ments for initiating responsive measures in good time.

Innovation Maps function as central navigation systems to sustainably create and growth businesses in our VUCA world. Every Innovation Map is based on a Trend Map. The Innovation Map contains …

  • A description of the present situation by visua­lizing (a) the most important physical and non-physical assets of the business, (b) the recognized business oppor­tu­nities and challenges, and most import­antly © the innovation gap, which represents the requi­re­ments and challenges of the company’s innovation portfolio relative to its business growth goals;
  • a picture of the future, derived from the trends that are important for the company;
  • areas of potential business growth evaluated in terms of growth potential and innovation level;
  • a roadmap that highlights how the company intends to exploit its areas of potential growth and to close its innovation gaps.

The effec­ti­veness and efficiency of a navigation system depends to a large degree on its ability to involve the key employees of a company in their entirety, so that they collec­tively (a) recognize changes, challenges and oppor­tu­nities in their markets (and in their wider business environment), (b) define their common goals, and © coördinate their actions. Jointly recognizing and agreeing on priorities is a crucial factor in a situation where available resources are scarce, and where compe­tition exists between the needs of day-to-day businesses and future-oriented growth activities. Effective collective action presup­poses that common images of reality exist and that these images are constantly updated via multi-direc­tional commu­ni­cation [2]. The quality and quantity of future-oriented inter­ac­tions among the key employees of a company have a profound impact on the usefulness of its navigation systems, and therefore on the long-term success of the company as a whole.

This is where Strategic Maps come in. Strategic Mapping requires intense inter­ac­tions at the map-creation stage, but also during discus­sions of the maps, which are printed out as posters as a means to stimulate debates of the future-orien­tation of the company. The Maps become working tools. They are written and noted on. They are thus the subject of permanent change and they make the change process trans­parent.

Figure 2: The Innovation Map exhibits pathways to sustainable growth in a coherent form

So there are proven tools to help us sustainably grow even in our highly complex VUCA world. There is value already in simply recognizing this fact.

However, these tools will not deliver their full potential if applied bureau­cra­ti­cally so that decisions are delayed or watered-down. In order to reap the full benefits of Strategic Mapping, many companies must lean to act with higher degrees of Agility. But how can agile organiz­a­tions be realized? This will be the subject of another article in this series on www.futurebizz.de within the next few weeks.

And by the way: How do you judge your chances of navigating your business in our changing world with the outlined approaches of Strategic Mapping? We look forward to your feedback and sugge­stions.

List of sources

[1] See also: https://www.business-wissen.de/hb/funktion-und-aufbau-einer-strategy-map/
[2] Weick, K.E.; Sutcliff, K.M.: “Managing the Unexpected”, Wiley, New Jersey 2015, p.21f

Do we need clearly defined innovation processes? And what should they look like?

Many companies do not distin­guish suffi­ci­ently between innovation processes and product develo­pment processes, such as pre-develo­pment. As a result, they limit their capability to innovate as well as their future-viability while at the same time generating internal conflicts. In this article, we would like to point out the importance of clearly defined and tailor-made innovation processes, and provide guidance on appro­priate proce­dural approaches as a function of the innovation level and the innovation momentum of innovation propo­si­tions.

By Friedhelm Boettcher und Karl-Michael Schumann

Innovation can be a very complex under­taking and often not successful at that. In many cases, this can be attri­buted to an insuf­fi­ci­ently developed innovation culture in combi­nation with inade­quate, limited or even lacking syste­matic innovation management:

  • The processes and proce­dural models for the develo­pment of innova­tions are not clearly enough defined and are often not adequately managed. This situation is often encoun­tered when the innovation propo­sition does not match the company’s previous fields of experience or activities.
  • The innovation project management processes do not match the desired or necessary level of innovation and the innovation momentum required for market success.
  • There is a low or under­de­ve­loped capability or desire to act proac­tively and to respond quickly to changes in the business environment.

This has the conse­quence that …

  • … decision-makers lack the necessary confi­dence and decisions are not taken at all, half-heartedly or too late,
  • … innovation projects are not resourced adequately due to the competing requi­re­ments of the day-to-day business. The company’s various compe­tencies cannot be suffi­ci­ently integrated into the innovation projects, which leads to a waste of resources,
  • … the most innovative employees are demoti­vated and leave the company. The challenge to “innovate” is “scorched”, and the company’s ability to change and improve is damaged for a long time.

In order to prevent this, companies have to deal more inten­sively with the confi­gu­ration of their innovation system, and build coherent innovation archi­tec­tures[1].

Figure 1: An innovation archi­tecture as the basis for agile innovation management

What is an “innovation process”?

The integrated opera­tional innovation process from finding ideas to innovation success is a crucial segment of the innovation archi­tecture. We define the term “innovation process” here as a coherent set of activities and decisions to generate specific contri­bu­tions that are necessary to success­fully realize innova­tions. All individual contri­bu­tions must meet defined success criteria.

With that said, four opera­tional elements of the innovation process can be distin­guished:

  1. The Front-End of Innovation (FEI): The develo­pment of innovation ideas and concepts
  2. The Back-End of Innovation (BEI): The develo­pment of offers and services to market maturity
  3. Go-To-Market (GtM): The execution of the launch plan to launch and disse­minate the offer or service in a market or to generate a new market.
  4. Customer Feed Back and Integration: The coöpe­ration with customers to develop a conti­nually advancing under­standing of the conse­quences of the purchased offer or service on the customers’ side, and to start a new innovation cycle.

The four elements differ funda­mentally in terms of (a) their achie­ve­ments, (b) their starting points, © their characters, (d) their proce­dural and struc­tural charac­te­ri­stics, and the compe­tences necessary to success­fully carry out the respective activities. The clear and syste­matic diffe­ren­tiation of the four elements is important because each one provides a parti­cular, irreplaceable contri­bution to successful innovation. The experience of decades of innovation management (and more recently of design thinking) shows, for example, that top results from the “front-end” cannot be achieved by simple standard “back-end” activities and vice versa. Only the coördi­nated interplay of all four elements leads to top innovation process results.

In this article we would first like to focus on the definition and inter­action of the front-end and back-end of innovation

What do we mean by “front-end” and “back-end” of innovation, and why is this distinction important?

“Front-end” activities generate a (preli­minary, first) business case with a new product/service concept or a new business model that represent options for new innova­tions. These deliver­ables enable qualified management decisions on the investment of funds and resources to start a new back-end develo­pment project, and to assess the impact of these decisions on the value and balance of the company’s innovation project portfolio.

“Back-end” activities generate marketable product/service offerings and/or business models that can be produced and sold or executed, respec­tively. The “back-end” activities are completed when “readiness” to enter the market is achieved. In addition to the ability to deliver the offering to the customer, this includes all technical and opera­tional factors, including trade struc­tures, financing and compliance with regula­tions. The management can make qualified “go-to-market” decisions on the basis of completion reports relating to all the readiness elements mentioned. An innovation might “go-to-market” at full power, or through a step-by-step market entry that builds up a learning relati­onship in coöpe­ration with the first customers.

The “Front-End” activities create the basis for the “Back-End” activities and thus precede them “logically”. The results of the front-end determine what is to be developed and what is to be invested in. In practice, however, front-end and back-end can sometimes run (at least partly) in parallel. This can happen, for example, when knowledge obtained early in the front-end already enables certain investment decisions for back-end activities, or when first front-end “prototype” products or services can or should be sold to early adopters as minimal viable products (MVP) for gathering in-market knowledge and for starting market creation.

Table 1: The key charac­te­ri­stics distin­guishing front-end and back-end of innovation

There is not only one innovation process

There is no “one-size-fits-all” solution in the design of the innovation processes for all kinds of innova­tions or businesses. The successful processing of innovation propo­si­tions presup­poses that a) the innovation process approach is in line with the desired innovation level[2] and the expected innovation momentum of the innovation propo­sition[3], b) the proximity to the core compe­tence of the company is taken into account, and c) an effective management of the innovation activities is enabled. Depending on each one of these factors,

  • different types of innovation decisions must be made, and different ways of getting to these decisions must be used,
  • different framework condi­tions, and different proce­dural models must be made available,
  • different innovation methods and tools must be used to develop the innovation propo­si­tions.

The precise design of the innovation processes depends on the specific condi­tions and needs of the individual companies. For orien­tation, generic processes for typical innovation levels, innovation momentums, and proximity to the core compe­tence of the companies are described below (see Figure 2).

INNVOVATION PROCESSES

Figure 2: Depending on the innovation level, innovation momentum and proximity to the core compe­tence of the companies, three different generic approaches can be distin­guished in the front-end as well as the back-end of innovation.

Generic Front-End-Processes

a) Embryonic FEI

Oppor­tu­nities for innovative offers are identified and selected using simple methods for idea finding and idea management. Selected ideas are further “incubated” and passed on to a standard back-end product develo­pment process (PDP) on the basis of requi­rement catalogs.

b) Mixed FEI

A mixed FEI process is typically used whenever a simple transfer of an idea out of an embryonic FEI on to a standard-PDP is not suitable. This can occur when an idea requires peculiar feasi­bility assess­ments, functioning proto­types for testing or solutions of difficult technical problems. In all of these circum­stances it is desired to reduce the risks of product develo­pment related to financial and staffing resources, and to build up technical or commercial knowledge. In many cases the mixed-FEI will also conduct advanced syste­matic analyses of markets, products and techno­logies, often coupled with Roadmapping and Scenario Analysis. In many companies, a so-called „advance develo­pment“ represents the mixed FEI. The results of this mixed-FEI process are trans­ferred to a standard-PDP or a Stage-and-Gate back-end process. In some cases there is also a close exchange with a Syste­matic-FEI possible.

c) Syste­matic FEI

In a Syste­matic FEI, new innovation oppor­tu­nities, ideas and concepts for innovative offers and business models are syste­ma­ti­cally and conti­nuously searched for and developed in such a way that they can be success­fully realized via subse­quent back-end processes (see Fig. 3). This FEI process includes advanced analyses of the environment with Strategic Foresight, focused Market Construction to identify new innovation oppor­tu­nities, syste­matic idea generation, and develo­pment of ideas into concepts of offerings, business models and business cases by using proce­dural approaches that oscillate between diverging creative and converging analy­tical processes. The Syste­matic FEI is primarily used when disruptive innova­tions or new business models are sought outside the tradi­tional experience and core compe­tence of the companies. The focus here is on generating new knowledge about the needs and behaviors of customers in new markets or for completely new appli­ca­tions, about future markets and the develo­pment of innovative service offerings. Learning about minimal viable products in connection with the parallel develo­pment of market entry strategies is of great importance here. Results from the Syste­matic FEI can be trans­ferred to all back-end processes, depending on their charac­te­ri­stics. In general the Syste­matic FEI will transfer its results to an Agile Stage-and-Gate PDP or to an Agile Innovation Circle.

Figure 3: An agile front-end of innovation process model — modular, iterative and commu­tative

Generic Back-End-Processes

a) Standard product develo­pment processes (Standard — PDPs)

An improved product or service offer (also as a variant or as a conven­tional product adapt­ation) is syste­ma­ti­cally developed based on a customer request or sales inquiry or based on results of the classical idea management. The technology and process principles to be used are clear but still need to be adapted to the intended properties of the product. The realiz­ation of the concept takes place in a standar­dized product develo­pment process (PDP) with clearly defined documents, decision points, and criteria for approvals. Line managers respon­sible within the develo­pment process can make decisions fast and non-bureau­cra­ti­cally. The risk of using resources for unsuc­cessful develo­pment projects is estimated to be low. Therefore, resources for the entire project can be released at the start of the project.

b) Agile Stage-and-Gate processes

The starting point here is a “project charter” as a transfer document from idea management or from the syste­matic develo­pment of a business idea, e.g. via an FEI (partly including ”advance develo­pment”). The trans­for­mation of the offering concept or the business model to market maturity takes place within the framework of a defined Stage-and- Gate process. The decision points for step-by-step invest­ments of financial and human resources into the project and the deliver­ables for each stage are clearly defined or definable. The decision criteria and the decision-makers to be involved are named in advance, depending on the task at hand. The risk of using resources for less or not at all successful develo­pment projects is estimated to be higher. Therefore, the release of resources for a project only takes place step by step as a “gate” decision after successful completion of a develo­pment “stage”.

c) Agile Innovation Circle Processes

Innovative offers or business ideas are imple­mented in an agile innovation circle when the develo­pment of the offer and the market are still in a very early phase and no standard organiz­a­tional struc­tures exist for their imple­men­tation. The learning process that started in the Syste­matic FEI is continued under start-up condi­tions. Organiz­a­tional struc­tures are being set up in parallel to the develo­pment of the offerings or business model and to their market penetration. The risk of the (possibly unpro­fi­table) use of resources for a start-up lies primarily with the investor in addition to the innovator. In this sense, an “investor” can also be an estab­lished company that assumes this “startup investor” role in an internal relati­onship with an internal develo­pment project and the developers respon­sible for it.

Table 2: Evaluation criteria for assigning innovation projects to the different process models in the front-end and back-end of innovation.

The allocation of projects to the appro­priate FEI and BEI process model is based on criteria such as:
a) the expected innovation level, b) the expected innovation momentum, and c) the proximity to the company’s core compe­tence. A summary of an initial guidance for using these criteria can be found in Table 2.
The correct allocation of each one of the innovation propo­si­tions to the best suited innovation processes is one element of an active risk management approach that aims to signi­fi­cantly increase the proba­bility of commercial success of the entire innovation portfolio. The assignment of the individual innovation projects in the portfolio to a process model must be constantly reviewed and adapted. As a conse­quence, companies can and must master all process models described here. The number of projects processed in the different types of front-end and back-end processes is company-specific and is strongly deter­mined by decisions made, for example, in the strategic elements of the innovation archi­tecture.

Which inter­pre­tation of the term “process” is the basis of the innovation process?

In a business context, a “process” is inter­preted as a creation chain in which a commercial goal is achieved by a direc­tional sequence of activities, and the use of defined instru­ments and methods. The flow path of innovation processes, however, differs from this conven­tional inter­pre­tation of processes, even though there is a “logical” direction and sequence of activities in each one of the specific elements of the innovation process. The innovation process is largely a learning process, which generates new knowledge about (internal and external) customer needs, about oppor­tu­nities to satisfy these needs, and about ways of technical and organiz­a­tional imple­men­tation. This learning process is strictly non-linear, i.e. innovation activities are not necessarily carried out in the pre-defined “logical” order, but in an order that builds on — and responds to the needs of — the conti­nuous acqui­sition of knowledge. For example, it might be necessary and important a) to process in parallel certain activities that are far distant to each other in the “logical” sequence of activities, b) to run through work packages repeatedly in iterative process circles, or c) to jump forward or backwards in the logical chain of activities[4].

This special character of innovation processes challenges the skills of innovation managers, and demands a high degree of agility with regard to the design of work packages of the opera­tional processes, the decision-making processes and the operation of the company as a whole. These parti­cular topics, including the estab­lishment of the right innovation teams and the design of coöpe­ration proce­dures in innovation processes, will be dealt with in later publi­ca­tions, depending on the course of the comments and discus­sions on this article.

In summary: To manage innovation more success­fully, different innovation processes have to be applied depending on the innovation level and momentum of innovation propo­si­tions. There is no off-the-peg procedure. The good news is: There are evaluation criteria for innovation projects which can be used to determine how the innovation processes in the front and back end must be confi­gured. The right choice will have a profound positive impact on the success of innovation propo­si­tions.

Notes

[1] A more detailed discussion of the innovation archi­tecture is found in our article on https://boettcher-consulting.de/lost-in-innovation.

[2] We define “innovation level” as the degree of positive change that is caused by an innovation propo­sition, judged from the point of view of the user. The parameters to judge this change could be a) the impact on the user experience, b) the new habits enabled, or c) the broadness (i.e. how many users experience it) of the change.

[3] The term “innovation momentum” describes the temporal progress of innovation propo­si­tions including both their develo­pment and their diffusion. The parameters to judge this progress could be a) the pace and the changes of the pace, b) the frequency, c) the intensity (e.g. required necessity, resources, attention, relative signi­fi­cance) of the temporal progress of innovation.

[4] Due to the high levels of ambiguity and uncer­tainty of innovation projects, some organiz­a­tions assume that precise defini­tions and descrip­tions of innovation processes in enter­prises are not meaningful. However, in our many years as innovators, innovation managers, and business consul­tants we have realized that clearly defined and described, yet non-linear innovation processes provide an indis­pen­sible navigation system. This navigation system reveals the stadium of an innovation propo­sition, which activities need to be processed, the way the learning process progresses, and which management decisions need to be made.

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