In the Experimentation Phase, the innovation is tested in the real-life environment to validate hypotheses about its feasibility and value. The experimentation is performed in three six-week iterations in which a working solution is built, tested in the market and learnings are collected and evaluated. The Experimentation Phase extends across the Innovation Level into the Portfolio Level, where the total corporate portfolio of innovations is evaluated, prioritized and managed to create a maximum flow of innovations through the process. In the Organization Level, the Continuous Innovation Board applies Lean Budgeting principles to ensure flawless budget allocations to successful innovations, balancing investments across innovation horizons and strategic focus areas.
Innovation Level – SWICH
In the Experimentation Phase the idea becomes an ‘innovation’, as it is first introduced into the market, either as a concept, a prototype or a Minimum Viable Product. The objective of the experiment is to obtain real market feedback to validate either a value hypothesis, a feasibility hypothesis or both. At the core of the approach is a small, multidisciplinary Innovation Team which includes the Innovator. The experiments are short-cycled, meaning that there is a fixed time period in which the hypothesis is tested using a six-week process called the Six Week Innovation Challenge (SWICH). Each SWICH leads to a conclusion of the hypothesis: true, false or inconclusive. This result comes with a new hypothesis to be researched in the next SWICH. At the end of the SWICH a decision is made by the Continuous Innovation Board whether to continue or stop the experimentation. If the experiment is to be continued, the exact same routine is performed again. An innovation can run a maximum of three SWICHs (18 weeks) before it either progresses to the Scaling Up Phase or stops.
Portfolio Level – Pitch Week and Innovation Day
At Portfolio Level, the total corporate portfolio of innovations is evaluated, prioritized and managed to create a maximum flow of innovations through the process. Key to this process is the fluid cadence of evaluation and prioritization of each individual innovation against objective criteria and the shared views and opinions of decision makers. COIN addresses this need through the Pitch Week. At the end of each SWICH, Innovators pitch their results to the Continuous Innovation Board (CIB) and discuss the value of progression to the next experiment or Scaling Up Phase. The Pitch Week ensures that senior leadership from the CIB is readily available and does not form a bottleneck in decision-making and budget allocation. At the same time, it creates cadence and predictability in the output of experimentation. During Innovation Day, Innovators also have the opportunity to publicly share their progress, create innovation awareness and build a culture of continuous innovation.
Organization Level – Lean Budgeting
At the Organizational Level, the innovation budget is managed by the Continuous Innovation Board. To do so, Lean Budgeting methods are applied. Lean Budgeting is the practice of funding innovation initiatives just-in-time and just enough to reach the next stage of development and deployment. Innovations are tested during experimentation rounds in which the biggest fail factors are tested. Each time the innovation proves to have potential, the next round is funded. In this way, organizations are able to spend most of their money on successful ideas whilst spending the least possible amount on ideas which show less or no potential.