Does your company have a sales pipeline? Most firms have a system in place to track, monitor and manage all their sales initiatives and their sales process, starting from entering an identified prospect into the system, to keeping track of sales pitches or new sales initiatives in the pipeline, and ending with a converted new client or a closed, paid and booked deal. Moreover, in most firms, there is a process in place to regularly update, review and discuss the sales pipeline. For example, in my former life as a corporate banker at Deutsche Bank in Ho Chi Minh City, Manila and Hong Kong, we had a weekly meeting of the relationship management team and all product divisions to discuss and coordinate all client initiatives in the sales pipeline. So how about your company? Do you have a sales pipeline, and a regular process to review it and act on it?

“Business has only two functions — marketing and innovation,” noted management guru Peter Drucker pointedly. So far, our discussion has been concerned only with the first function, with sales being a key aspect of the marketing function. Let’s take a look at the second of Drucker’s functions, innovation. Does your company have an innovation pipeline? And do you have a system in place to track, monitor and manage all ideas and innovation initiatives in your firm?

If your firm is like most companies, you probably don’t have an innovation pipeline at all. And if you do have one, it is likely that you don’t manage it with the same verve as your sales pipeline, if at all. In today’s article and in the next, we will focus on the important concept of an innovation pipeline. Today, let’s kick off by first focusing on the concept and purpose of an innovation pipeline — and how you can set it up and manage it.

What is an innovation pipeline? An innovation pipeline is a formal system that a business uses to track innovation initiatives within the firm. Just as a sales pipeline allows management and the members of the sales team to get a quick overview of all sales initiatives, so does an innovation pipeline bundle all promising actual and potential innovation initiatives of a firm in one place for easy review by top management or an innovation manager.

Why do you need an innovation pipeline? Chances are that if you work in a large corporation, at this very moment some of your colleagues are working on a promising idea concept without senior management or the firm’s innovation manager being aware of it. Often, these individuals or teams decide to secretly work on their promising idea (skunk works), as they are afraid that the idea would be killed by a middle manager or by another team. In other companies, there may be an innovation project with a very promising value proposition waiting for allocation of budgets and resources; but as more and more time passes, the drive and motivation of the idea supporters decline, and the idea fades into oblivion, like so many other promising ideas before.

With an innovation pipeline, you formally establish an official system where promising ideas and innovation initiatives can be recorded, and which allows a business to keep track of status changes of the ideas and initiatives. An innovation pipeline can help to identify and “legitimize” unofficial skunk works initiatives, and to keep parked ideas or innovation initiatives alive, thus giving you the chance to come back to them at a later point in time when the time is right to bring them to life. I believe each company needs an innovation pipeline to keep track of and actively manage all promising innovation initiatives inside the firm.

Who is responsible for the innovation pipeline? I advocate that in smaller and medium-sized companies, the entrepreneur or one of the managing directors should be in charge of maintaining and managing the innovation pipeline. In larger corporations, innovation pipeline management should be one of the key responsibilities of an innovation manager, who directly reports to a board member in charge of innovation.

How to create an innovation pipeline? If you are an entrepreneur, creating an innovation pipeline can be as simple and easy as having dedicated pages in a notebook (or a document in a computer) to list all your value-adding ideas and innovation initiatives. The famed inventor Thomas Edison practiced this method. Medium-sized businesses can create a more comprehensive database using basic software programs like MS Excel or Access. Finally, larger corporations or firms with more sophisticated innovation needs may rely on more focused innovation management systems with offline and online innovation solutions (like the company BrightIdea.com) that are maintained by the Corporate Innovation Manager.

How do you manage an innovation pipeline? Just as with your sales pipeline, your business needs to actively manage its innovation pipeline by having review cycles at regular intervals (such as every 6 months). In an innovation pipeline meeting, the “pipeline manager” and a team of business heads and of other innovation stakeholders go through the innovation pipeline and discuss the various innovation initiatives of the firm. These meetings should be used to gain status updates on currently activated innovation initiatives, and to pitch initiatives that wait for senior management approval and budgets.

But what exactly is in the innovation pipeline? In a sales pipeline, you enter clients and potential client initiatives and deals, thereby differentiating different status categories that change over time (like “Identified Prospect”, “Pitching”, “Pending”, and so on). Similarly, an innovation pipeline captures promising ideas and innovation initiatives as well as their statuses as they go through the pipeline. Come back in two weeks from today to learn more.

© Dr. Detlef Reis 2010. This article was published in parallel in the Bangkok Post under the same title on 13 May 2010.