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Innovation Process – OPIM 651

Innovation Process – OPIM 651. simulated capital market. multivote. multivote. Darwinator system. Individual screening and preferences. ~50 opportunities developed by individuals. ~25 concepts developed by teams of 2. ~13 companies prototyped by teams of 4. 0-2 ventures launched.

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Innovation Process – OPIM 651

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  1. Innovation Process – OPIM 651 simulated capital market multivote multivote Darwinator system Individual screening and preferences ~50 opportunities developed by individuals ~25 concepts developed by teams of 2 ~13 companies prototyped by teams of 4 0-2 ventures launched ~250 opportunities submitted by individuals ~500 opportunities identified by individuals

  2. Shape of the Funnel “Yield” / “Filter Ratio” by Phase (Approximate values; From multiple sources.)

  3. Innovation Process Relative to Phase-Gate New Product Process

  4. Modifying the Funnel “delaying picking a winner until more uncertainty is resolved” “taking more draws from the opportunity distribution”

  5. Uncertainty and Investment Concept Development Prototype Launch realization of value Quality of opportunity Distribution of universe of all opportunities

  6. Capacity and Bottleneck Management • Essentially all key ideas from capacity/bottleneck management in operations apply to innovation processes: • Bottleneck resource is typically resource with highest (yield-adjusted) cost of capacity. • Low cost resources should typically not be capacity constraints. • Projects/opportunities/work is released to the system at the bottleneck rate. • Strategic use of buffers to trade off flow time and capacity utilization.

  7. Batch versus Flow Screening • American Idol uses both flow and batch screens • 10,000+ candidates • Flow screening applied early • Batch screening applied later • Batch screen helps pick the “best” winner, but: • Lumpy demand for process steps and/or • Extended flow time through process

  8. Spiral vs. Waterfall Process

  9. Business Development Relative to Existing NPI Process • Where do opportunities originate? • Active, structured exploration led by BD org. • “Pull” from innovation strategy. • Passive collection from various sources. • Active solicitation by BD org. • What are phases for early-stage opportunities? • Raw idea (text, single ppt) • Validated opportunity • Solution concept • Real, Win, Worth analysis • Prototype? • Are these phases the same for every opportunity? How is BD process budgeted? • When are opportunities released to development? • Hybrid batch/flow screening. • “Hot” opportunities released when ready. • Others released in planning cycles. • What are the criteria for release to development? • Business case. • Rank on Innovation Return Curve. Existing “Phase-Gate” Process • What are the different flavors of development organization? • Autonomous team. • Heavyweight project structure. • Lightweight project structure (status quo) New “Business Development” Process • How are opportunities moved along? • In early phases, many opportunities handled by the same BD team. • Later, a BD leader assigned, with part-time x-fn team drawn from larger org. Aim to include some who would be on NPI team. • Governance • Who decides/approves each round of selection?

  10. In what ways does approach vary by type of opportunity? new to world Horizon III new to us Market Novelty Horizon II Horizon I served by us in use by us new to us new to world Solution Novelty

  11. Levels of Innovation Process Management • We can describe the phases in our innovation process. • We know the current state of the process. • Flow rates at each phase. • Opportunities in progress at each phase. • We have analyzed and deliberately chosen our key process parameters. • Number of opportunities considered for each launch. • Aggressiveness of filter ratios by phase. • Capacity of each phase. • We have deliberately considered and made process strategy choices. • Organizational structure. • Make-buy and partnering decisions by phase. • Level of capacity flexibility. • Batch vs. flow by phase. • We engage in deliberate process improvement projects.

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