• IPACSO
  • IPACSO

    Innovation framework for ict security
  • 1
  • 2
image

European Cyber Security & Privacy Innovation Awards 2015

European cyber security and privacy innovation awards Read More
image

Cyber Security & Privacy Innovation Bootcamps

Bootcamps for Innovators, Investors, Policy Makers. Read More
image

Award Winner CRYPHO

Winner of the EU Privacy and Cyber Security Innovator Award Read More
image

And the winners are...

Check impressions of the conference, list of finalists and winners. Read More
image

Innovation Support Services

Support Services for Innovators, Investors, Clusters & Policy Makers Read More
  • 1

(continued from Process Types Part 1)

 

LEAN PROCESSES

In the past decade, the Lean movement made an impact on the way businesses bring new products to market. The term was first introduced by John Krafcik (Krafcik, 1988) when referring to the manufacturing approaches in the Japanese market in the eighties. Lean manufacturing is an approach that in its core is made to avoid waste in every aspect of the process. The approach takes many of its ideas from the Toyota Production System, as introduced by Taiichi Ono.


Among its tenets are drawing on the knowledge and creativity of individual workers, the shrinking of batch sizes, just-in-time production and inventory control, and an acceleration of cycle times. It taught the world the difference between value-creating activities and waste and showed how to build quality into products from the inside out. (Ries, The Lean Startup, 2011)

In more recent years, these “Lean” principles have been applied to other parts of industry and business outside of the production settings. A prime example is the “Lean Startup” movement pioneered by Eric Ries. The basic idea in the Lean Startup approach, as in the Lean Manufacturing approach, is that waste has to be minimized in the startup phase of new endeavours. This approach can be valuable to innovation in the wide sense as well, not just for startups. As stated by Ries, a startup can be very broadly defined as:

“A human institution designed to create a new product or service under conditions of extreme uncertainty” (Ries, The Lean Startup, 2011)

This definition mentions nothing about the size of the institution. Sometimes a startup is the classic example of the new, young organization with a clear entrepreneurial spirit, and sometimes a startup is a new or existing division in a large enterprise creating a new product or service. What they all have in common are the uncertain conditions. To deal with this uncertainty, Ries postulates that progress of a startup should be measured in terms of validated learning. The sooner the startup learns, and subsequently acts on that knowledge, the smaller the “waste” the organisation will produce. Learning, in the mind of the author, should happen primarily through the use of experiments. These are the principles that are at the core of the Lean Startup movement (Ries, THE LEAN STARTUP METHODOLOGY):

  • Enterpreneurs are everywhere: you do not have to identify with the prototypical young startup enterprise to be an entrepreneur.
  • Entrepreneurship is management: being an entrepreneur is not something that happens haphazard. A real management approach is required, albeit maybe different from the approaches that you find in classic management literature.
  • Validated Learning: the goal of the early stages of a startup is to learn how to build a sustainable business. The way to do this is through experiments that enable validated learning.
  • Innovation Accounting: startups require their own measurement system, called innovation accounting, describing how progress should be measured, and how work can be prioritized.
  • Build-Measure-Learn: there is a clear feedback loop to make validated learning possible, called the build-measure-learn cycle.

The Build-Measure-Learn feedback loop forms the process that Ries envisions for a lean startup. In order to get to “Validated Learning” as quickly as possible, one must build a prototype (which can range from a pen and paper prototype to a working prototype), measure the response through qualitative or quantitative research methods such as experiments, and learn from the results. The result of a learning phase should be either to fine-tune the approach, or to “pivot” to a radically different approach.


Figure 8: the Build-Measure-Learn Cycle (Ries, THE LEAN STARTUP METHODOLOGY)

8buildmeasurelearn

 

While Ries describes many of the important principles and corroborates them with examples, In (Maurya, Running Lean: Iterate from Plan A to a Plan That Works, 2012), the author of “Running Lean” (Maurya, Running Lean: Iterate from Plan A to a Plan That Works, 2012) gives a more practical approach to the “Lean Startup” process. There are three steps in the “Running Lean” process:

  • Document your plan A.
  • Identify the riskiest parts of your plan.
  • Systematically test your plan.

For documenting the plan, Maurya advises to use the “Lean Canvas”. The Lean Canvas, which is based on the Business Model Canvas by Alex Osterwalder (Osterwalder A. , 2010), is a one page overview of the business plan. Figure 9 provides an overview of the Lean Canvas.

9product

 

Figure 9: the Lean Canvas :

 (Maurya, Lean Canvas, 2012)

Once the lean canvas has been drafted (which Maurya advises to not do this by oneself, and preferably through interations), the riskiest parts must be identified. The biggest risk of most startups is not the technical feasibility, but rather building a product that nobody wants. Therefore Maurya stipulates that a startup goes through three phases:

  • Problem/Solution Fit: find out if we have a problem worth solving.
  • Product/Market Fit: find out if we have built something people want.
  • Scale: find out how we can accelerate growth.

Once the riskiest parts have been defined, it is time to systematically test the plan using the Build-Measure-Learn loop described earlier.

While the “Lean” processes definitely have their worth in the innovation space, we must be careful to generalize their applicability. First of all, even though many of the techniques have a common sense aura surrounding them, they have not been scientifically proven yet as being better than other models. Second, the lean approaches seem best suited to business where iterating through the loop multiple times in order to get client feedback is not a costly affair in itself, such as is the case for purely software based startups. Businesses where costly manufacturing is involved might not be so keen on a process that relies very heavily on iterative design and testing. Other critiques that have been posited can be found in (Kern, 2012), (Burgstone, 2012) and (Pelling, 2011).

 

AVAILABLE TEMPLATES

 

BIBLIOGRAPHY


Burgstone, J. (2012, 5 10). What's Wrong With the Lean Start-up. Opgeroepen op 10 30, 2014, van Inc.com: http://www.inc.com/jon-burgstone/flaws-in-the-lean-start-up.html
Cagnazzo, L., & Taticchi, P. B. (2008). A literature review on innovation management tools. Revista de Administração da Universidade Federal de Santa Maria, 316-330.
Chesbrough, H. (2003). Open innovation: the new imperative for creating and profiting from technology. Harvard business school press.
Chesbrough, H., 2004. Open Innovation Renewing Growth from Industrial R&D. Minneapolis, s.n.
du Preez, N. & Louw, L., 2008. A framework for managing the innovation process. CapeTown, South Africa, s.n 
Enkel, E., Gassmann, O. & Chesbrough, H., 2009. Open R&D and Open Innovation: exploring the phenomenon. , 39(4): 311-316.. R&D Management, 39(4), pp. 311-316.
Forrest, J. (1991). Models of the process of technological innovation. Technology analysis and strategic management, 3(4), 439-452.
Galanakis, K. (2006). Innovation process: Make sense using systems thinking. Technovation, 26(11), 1222-1232.
Hobday. (2005). Firm-level Innovation Models: Perspectives on Research in Developed and Developing Countries. Technology analysis & strategic management, 121-146.
Kern, E. (2012, 12 3). Marc Andreessen: Not every startup should be a Lean Startup or embrace the pivot. Opgeroepen op 10 30, 2014, van GigaOm: https://gigaom.com/2012/12/03/marc-andreessen-not-every-startup-should-be-a-lean-startup-or-embrace-the-pivot/
Krafcik, J. F. (1988). Triumph of the Lean Production System. MIT Sloan Management Review, 30(1).
Maurya, A. (2012). Lean Canvas. Opgeroepen op 10 30, 2014, van Practive Trumps Theory: http://practicetrumpstheory.com
Maurya, A. (2012). Running Lean: Iterate from Plan A to a Plan That Works. O'Reilly Media.
Mowery, D. C., & Rosenberg, N. (1978). The Influence of Market Demand upon Innovation: a critical review of some recent empirical studies. Research Policy.
O'Raghallaigh, P., Sammon, D., & Murphy, C. (2011). A re-conceptualisation of innovation models to support decision design. Journal of decision systems, 20, 361-382.
Osterwalder, A. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. John Wiley and Sons.
Pavitt, K. (2005). Innovation processes. The Oxford handbook of innovation.
Pelling, N. (2011, 5 10). Lean Startups suck. Here are 10 reasons why…. Opgeroepen op 10 28, 2014, van Funding Startups: http://nanodome.wordpress.com/2011/10/05/lean-startups-suck-here-are-10-reasons-why/
Ries, E. (2011). The Lean Startup. Crown Business.
Ries, E. (sd). THE LEAN STARTUP METHODOLOGY. Opgeroepen op 10 30, 2014, van The Lean Startup: http://theleanstartup.com/principles
Rothwell, R. (1992). Developments Towards the Fifth Generation Model of Innovation. Technology Analysis and Strategic Management, 4(1), 73-75.
Rothwell, R. (1993). Chair Hydro—Quebec Conference enGestion de al Technologie. Systems Integration and Networking: The fifth generation innovation process. Montreal.
Rothwell, R. (1994). Towards the fifth-generation innovation process. International marketing review, 11, 7-31.
Trott, P. (2005). Innovation Management and New Product Development. Harlow: Pearson Education Limited.

 

process icon 01process icon 03process icon 04

 

Innovation in an organization does not happen by coincidence or “magic”. Instead, there needs to be a systematic process in place that creates the right environment for innovation in an organization to arise (John Jeston, 2008). The view that large gains in efficiency and effectiveness can be gotten from adopting a process oriented approach has gained considerable influence in the past two decades. As described in (Hammer, 2007):
In virtually every industry, companies of all sizes have achieved extraordinary improvements in cost, quality, speed, profitability, and other key areas by focusing on, measuring, and redesigning their customer-facing and internal processes.
The Process theme consists of two parts. First, we provide an overview various innovation processes that exist outside of the PaCS Core Innovation Process. In this section we also introduce the notion of “lean” innovation as an alternative approach. In addition, we introduce those governance tools and activities that an organization can use to assure itself of the approach it has taken regarding the innovation process itself. Using this theme, an organization can assess its innovation process maturity level and indicate gaps between its current state and desired state.

 

INNOVATION MODEL PROCESS FLOWS


Given the proliferation in research and scholarly attention afforded to innovation over the last three decades, a diverse range of innovation modelling processes exist in the literature. The existing catalogue of process models of innovation can be generally subdivided into three umbrella categories: (1) Linear (2) phased models, and (3) non-linear, coupling, cyclical models.

LINEAR PROCESS FLOWS
Early models of innovation presented innovation as a linear phenomenon where each aspect was considered modular and unconnected to other parts of the innovation process. The linear model hypothesises that innovation starts with basic research, followed by applied research and development, and culminating with production and diffusion. The theory identifies two traditional linear underpinning approaches to innovation (Rothwell, 1994); “Technology push” and “demand pull”. Regarding technology push, innovation is seen considered to be driven solely by scientific advances whereas the latter demand pull approach views innovation as a response to demands for new products and processes. However, it was found early on that these models did not survive empirical scrutiny as this representation oversimplified the innovation process. Indeed, (Kline & Rosenberg, 1986) note that models that depict innovation as “…a smooth, well-behaved linear process badly misspecify the nature and direction of the causal factors at work. Innovation is complex, uncertain, somewhat disorderly, and subject to changes of many sorts”.

PHASED PROCESS FLOWS
Phased models (Figure 1) serve as a management tool to map, systemise, control and review innovation progress across the sequential phases involved in an innovation project (Hughes & Chafin, 1996). As illustrated in Figure 1 below, Inputs and outputs for each phase are defined with management reviews at the end of each phase to determine the continuation of a project (“go-no-go”). The advantages of such an approach is in reducing uncertainty and promoting completion of sub stages of the innovation process. Equally so, the phased approach deals primarily with the development phase, and fails to accommodate any commercialisation perspectives (Verworn & Herstatt, 2002).


Figure 1 Linear Phase Review Model

stage1linear



Source: (Hughes & Chafin, 1996)

The process model by Pleschak et al. (Figure 2) delves into more detail across each stage of the innovation process and introduces the role for external stakeholders. Of merit for framing the range of issues surrounding innovation modelling, the Pleschak model specifically accommodates “…the possibility of truncation during every stage of the innovation process due to the rejection of an idea, technical or economical failure similar to Cooper’s gates” (Verworn & Herstatt, 2002).


Figure 2 Pleschak Process Model

stage2pleschak



Source: cited in (Verworn & Herstatt, 2002)

The Stage-Gate process (Cooper, 1990) also represents distinctive and orderly phases (Figure 3). The innovation process, according to the Stage Gate model consists of a range of gates to evaluate the various stages in the innovation development journey.

Figure 3 Stage Gate Model

stage3stagegate



Source: (Cooper, 1990)
At gate 1, the idea is evaluated according to must meet and should meet criteria such as strategic alignment, feasibility or fit with company policies. (Verworn & Herstatt, 2002) describe the stage gates as follows:
• Stage 1 represents a preliminary assessment of the project in terms of market, technology, and financials.
• After passing a second gate, a detailed investigation follows during stage 2 definition. Output from this stage is a business plan which is the basis for the decision on business case at gate 3.
• Stage 3 contains the actual development of the product and a marketing concept. Deliverable of this stage is a prototype product.
• Gate 4 ensures that the developed product is consistent with the definition specified at gate 3. In-house product tests, customer field trials, test markets, and trial productions are typical activities during the validation stage 4.
• Gate 5 decides on production start-up and market launch, which follow during stage 5. Objective of a terminating review is to compare actual with expected results and assess the entire project.

(Ulrich & Eppinger, 1995) normative process model (Figure 4) resembles Cooper’s stage-gate-process through mapping activities each function carries out during the development of an innovation. The noteworthiness of this model for (Verworn & Herstatt, 2002) is “…the interdisciplinary point of view. Every function is weaved into each phase of the development process”.

 

Figure 4 Normative Process Model

stage4normative



Source: (Ulrich & Eppinger, 1995)

Reflecting a project management orientation focus in terms of innovation modelling, the development funnel metaphor has been incorporated by researchers to illustrate the process from idea to innovation execution (Wheelwright & Clark, 1992); (McGrath, 1996)). The wide element of the funnel, reflects the idea generation/concept development stage and the funnel narrows as ideas progress through corresponding development, test and release phases (as illustrated in Fig 5)

Figure 5 PACE NPD Funnel

stage5funnnel


Source: (McGrath, 1996)

The Innovation Pentathlon Model (Goffin & Pfeiffer, 1999) also incorporates a funnel approach and highlights five performance areas which must be prioritised and integrated for effective innovation (Goffin & Mitchell, 2005); (Oke, et al., 2007). The five interlocking elements referred to in the pentathlon are:
• Ideas Management & Creativity Management;
• Prioritization, Selection and Portfolio Management;
• Implementation Management (NPD etc.);
• Innovation Strategy;
• Human Resource Management (People and Organisation).

The pentathlon framework accommodates a wider range of soft organisational issues than the traditional linear innovation model. It overcomes the deficiencies of typical phased models by including: HRM, Creativity/Ideas Management, the selection of priorities, and the importance of market conditions (in respect of the products, processes and services). At the top of the model lies the role of an innovation strategy, which will dictate what is needed in terms of the focus and goals, communication, technology and the measurement of success. In the middle of the model, a flow is often conceptualised within a funnel, indicating a move of the ideas through a prioritisation process as and through to implementation and new product development interactions with the marketplace. Underneath this middle section, the model depicts the formalisation of the human element in innovation. The pentathlon framework (Goffin & Pfeiffer, 1999) is distinctive from earlier models in featuring the human factor in innovation; specifically, recognising how the people and organizational climate play a role, and consequently, the value of seeking a conducive culture, where people are motivated to innovate.

Mindful of the combination of technical activities occurring in the innovation process, the external forces of the market place, as well as the complex interac tions and iterations between the various stages of the process, researchers in the field of innovation have developed more complex and inclusive models based upon the limitations of linear and sequential models (Leger & Swaminatham, 2007).

 

NON-LINEAR PROCESS FLOWS
Kline and Rosenberg’s Chain Linked innovation model (Figure 6) combines both market pull and technology push orientations, identifies five paths of innovation process (C): starting with the perception of a new market opportunity and/or a new science and technology-based invention; this is necessarily followed by the ‘analytic design’ (D) for a new product or process, and subsequently leads to development, production and marketing (Kline & Rosenberg, 1986).


Figure 6 Chain Linked Innovation Model

stage6chainlinked

Source: (Kline & Rosenberg, 1986)

The process accomodates feedback loops (f, F) link each downstream phase in the central chain with the phase immediately preceding it and longer feedback loops link perceived market demand and product users with phases upstream. The second set of relationships links the innovation process embedded in firms and industries with the scientific and technical knowledge base and with research (K). In terms of use case scenarios – innovators search the existing knowledge bases to seek a solution to an identified problem (1), and if such solutions are available, continues along the innovation chain(2). If no solution knowledge is available, then the innovator resorts to conducting research (3). The restults of such research activities are then fed into the innovation chain (4). Finally, the results are subsequently integrated into the scientific arena (S).

Earlier versions of Cooper et al.’s Stage Gate process models prescribed that the next phase can only start, if the project complied with all the requirements prior one. However, the stage gate process has evolved to incorporate feedback and spiral loops to address the limitation of a sequential pattern, as illustrated in Figure 7.

 

Figure 7 The Next Generation Idea to Launch System

stage7nextgeneration

Source: (Cooper, 2012)

Departing from a linear conceptualisation, Berkhout’s Cyclic Innovation Model (CIM) developed in the nineties views the innovation process as more than just technical invention and describes the innovation arena by a ‘circle of change' linking changes in science (left) and industry (right), and changes in technology (top) and markets (bottom) (Berhkout, 2000); (Berkhout, et al., 2007). As illustrated in Figure 8, the model architecture is not a chain but a circle: where ideas may start anywhere in the circle and proceed clockwise or anticlockwise. Equally, the model portrays a system of dynamic processes –with four ‘nodes of change’: scientific exploration, technological research, product creations and market transitions and between these nodes there are ‘cycles of change’ (Berkhout, et al., 2010).

 

Figure 8 Cyclical Innovation Model

stage8cyclical

Source: (Berkhout, et al., 2010)

1. BIBLIOGRAPHY
Berhkout, A., 2000. The Dynamic Role of Knowledge in Innovation. An Integrated Framework of Cyclic Networks for the Assessment of Technological Change and Sustainable Growth. the Netherlands: Delft University Press..
Berkhout, A., Van der Duin, P., Hartmann, D. & Ortt, J., 2007. Connecting Hard Sciences with Soft Values Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Amsterdam: Elsevier.
Berkhout, G., Hartmann, D. & Trott, P., 2010. Connecting Technological Capabilities with Market Needs using a Cyclic Innovation Model.. R&D Management, 40(5), pp. 474-490.
Cooper, R., 1990. Stage-Gate Systems: a new tool for managing new products. Business Horizons, Volume 33, pp. 44-56.
Cooper, R., 2012. What Next After Stage-Gate?. Research-Technology Management, pp. 20-31.
Goffin, K. & Mitchell, R., 2005. Innovation management: Strategy and implementation using the pentathlon framework. Basingstoke: Palgrave Macmillan.
Goffin, K. & Pfeiffer, R., 1999. Innovation Management in UK and German Manufacturing Companies. London: Anglo-German Foundation.
Hammer, M. (2007, April). The Process Audit. Harvard Business Review, 85(4).
Hughes, G. & Chafin, D., 1996. Turning new product development into a continuous. Journal of Product Innovation Management, Volume 13, pp. 89-104.
John Jeston, J. N. (2008). Business Process Management - Practical guidelines to succesful implementations (Second edition ed.). Oxon: Routledge.
Kline, S. & Rosenberg, N., 1986. An overview of innovation. In: The Positive Sum Strategy: Harnessing Technology for Economic Growth. Washington: National Academy Press, pp. 275-305.
Leger, A. & Swaminatham, S., 2007. Innovation Theories: Relevance and Implications for Developing Country Innovation., s.l.: Discussion Paper No. 743, DIW Berlin..
McGrath, M., 1996. Setting the PACE® in Product Development. Boston, MA: Butterworth-Heinemann.
Oke, A., Burke, G. & Myers, A., 2007. Innovation Types and Performance in Growing UK SMEs. International Journal of Operations and Production Management, 27(7), pp. 735-53.
Rothwell, R., 1994. Towards the Fifth-Generation Innovation Process. International Marketing Review, 11(1), pp. 7-31.
Verworn, B. & Herstatt, C., 2002. The Innovation Process: an Introduction to Process Models., s.l.: Working Paper No. 12, Technical University of Hamburg..
Ulrich, K. & Eppinger, S., 1995. Product design and development. Ney York: McGraw Hill.

 

Getting Started

Which type of company are you? Choose one of the options below and get a head-start.

{module 139}

Framework Overview

Navigate through the different parts of the Framework

{module 141}

leeg