The Innovation Level is the process in the framework which guides a single idea from inception to validation through analysis and experiments to scaling up and embedding in the organization.
Idea and Ownership
In the Ideation Phase, opportunities for innovation are spotted by employees in the company. Ideas can be anything such as new technology that might have customer value and/or improvements to existing processes, products or services. They can either be incremental improvements to existing products or services or radical changes such as disruptive technologies and new business models.
In the Ideation Phase, ideas are not yet called innovations. Ideas are called ‘innovations’ when they enter the Experimentation Phase, where the value and feasibility hypotheses of the idea are tested in a real-life environment. In this phase, ideas materialize through clear description and refinement and through ownership. An idea cannot be realized without an owner willing to take responsibility for its realization, this owner is called the Innovator. Ideas can be shared among people, but remain floating. Innovations without an owner to drive its development have no way of succeeding. In the Continuous Innovation Framework, ownership of the innovation is one of the key principles of success.
When an idea has been defined, its ownership is clear and the Innovator is ready to bring his/her idea to realization, the idea can move to the Validation Phase.
Ideas can be validated using various Validation Methods such as Value Proposition Design and Business Model Canvas. Validation should take no more than a few days at the maximum and should be performed by the Innovator and a multidisciplinary Innovation Team of participants which both have a stake in the outcome. Innovation Coaches will safeguard the independent nature of the validation in the long-term interest of the organization over the short-term interest of a division or department.
At the end of the Validation Phase, enough should be written down about the idea such as a light business case, the assessment of the value and feasibility, necessary resources and/or potential team members and a first hypothesis for experimentation.
Based upon this validation, the Innovator and the Innovation Coaches will establish the outcome of the Validation Phase as one of three outcomes:
- The idea is found to have limited or no potential customer value; it will not enter the Experimentation Phase.
- The idea is found to be technically unfeasible even in the smallest possible experiment or testing the first hypothesis of the customer value proves to be so expensive that it cannot be undertaken. It will not enter the Experimentation Phase.
- Potential customer value has been identified. In this case, the biggest fail factor to the creation and/or delivery of this value will be identified. This factor will be described as a hypothesis to be tested in a first experiment in the Experimentation Phase. For any experiment below a certain amount – the Innovation Coaches can decide to move to the Experimentation Phase. For experiments above this number, the Continuous Innovation Board is involved in the decision.
For all Ideas who have not made it to the Experimentation Phase, the Innovator together with the Innovation Coaches prepares lessons learned which can be used for next validation sessions.
The Experimentation Phase is divided into three experimentation cycles. In each cycle, a new hypothesis about the expected customer value and/or the feasibility of realization is tested by addressing the biggest fail factor to the successful delivery of value. Each experimentation cycle is funded using the Lean Budgeting practice, meaning that innovations are given just enough resources and budget to reach the next stage of development and deployment.
Each experimentation cycle lasts six weeks and is performed using the Six Weeks Innovation Challenge (SWICH) method. The outcome of each experiment can be one of three things:
- The hypothesis was proven true: the experiment is successful and results in a new hypothesis describing the next big fail factor. The innovation enters the second Experimentation Phase.
- The hypothesis was proven wrong: the biggest fail factor could not be overcome. The innovation will not be pursued any further.
- The outcome of the experiment was inconclusive and further tests are necessary. A new hypothesis for this fail factor will be created. If such a ‘second’ experiment is again inconclusive, the innovation will not be pursued any further.
The last week of every SWICH is called the Pitch Week. During Pitch Week, Innovation Teams present their results to the Continuous Innovation Board (CIB) and discuss the value of progression to the next experiment or to the Scaling Up Phase. They decide on whether to progress the innovation to the next experimentation cycle or the Scaling Up Phase, or to stop. 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 and their innovation Teams also have the opportunity to publicly demonstrate their innovations and share their progress and learnings. This public exchange of innovation output creates an organization-wide innovation awareness and builds a culture of continuous innovation.
The purpose of the Scaling Up Phase is to turn the innovation into a clearly defined and positioned product, process and/or organizational structure that can be sustained by the existing organization.
The Scaling Up Phase is the first phase in which an innovation is brought under the management of the organization’s line management. During this phase, the ownership of the innovation gradually transfers from the Innovator to the Business Owner designated by the CIB. During this process, the CIB will appoint from its ranks a CIB Ambassador for the innovation, who will mitigate any potential conflict of interest with the business between further developing the innovation and reaching its business objectives. The CIB ambassador will work with the Innovator and Business Owner to ensure the viable scaling of the innovation to an operational state (as product, service, process etc.) and manage the transfer of ownership and accountability to the line management.
In the early stages of the Scaling Up Phase the innovation is still considered to be an experiment and is continuously validated for its feasibility and business value delivery. The cadence of SWICHs is maintained and development of the innovation is still organized by validating hypothesis on feasibility or value during every iteration. Depending on the available capacity to further develop the innovation, iterations may continue to last six weeks, or may be shortened to adapt to regular organizational development cadence, such as 2 week sprints. The number of iterations in this phase is not limited, as long as each period results in sustainable, measurable progress in the delivery of customer value.
Although there is no formal end point to this phase, other than when the CIB indicates the innovation to have met certain exit-criteria for the Scaling Up Phase, an innovation is generally considered to have grown out of this phase when the Innovation Metrics have become purely financial. At this point, the innovation moves into the Embedding Phase.
In the Embedding Phase, the ownership of the innovation is fully in the hands of the line organization, and the CIB will no longer serve as ambassador to the innovation. During this phase, Business Owners will oversee the (further) embedding of the innovation in the organization’s Architecture, Competencies, Processes, and Partnerships.
Early on in the Embedding Phase the funding from the innovation budget stops and the line organization becomes solely responsible for the costs of the further development and operations. At this point the innovation has either replaced the original process or complements it by adding new value.
The ‘formal’ moment of embedding is when the CIB and Business Owners decide that the innovation meets the Definition of Done criteria for embedding and when the innovation is moved on the Portfolio Kanban into the ‘learnings’ column. Continuous Improvement is an important concept of the Continuous innovation Framework, Innovation Coaches will record the learnings and best practices of all innovations in the learnings repository.