Two weeks ago, we talked about the necessity for each company to have an innovation pipeline, parallel to a sales pipeline, to comply with the basic tenet of management guru Peter Drucker: “Business has only two functions — marketing and innovation.” We discussed the purpose, set-up and management of an innovation pipeline in the first article, so today let’s focus on the exact composition of an innovation pipeline and its related sub-systems. We follow a valuable idea as it enters the Idea Funnel, passes the Fine-Election Gate, and moves forward into the various chambers of the Innovation Pipeline.

The Idea Funnel

First, as an entrepreneur or innovation manager, capture all valuable, promising ideas that are developed inside your organization in an Idea Funnel. This “Idea Pipeline” has two chambers, one pre-evaluation chamber and one fine-evaluation chamber, with two filter gates at each end to pass to the next chamber. At regular intervals, pre-screen the ideas in the pre-election chamber by looking at the pros and cons of each idea in order to determine which of these ideas deserve a close-up look. As a rule of thumb, roughly four out of five ideas are filtered out here.

The few surviving ideas move forward into a fine-evaluation chamber. Here, you take more time to look at the positive, negative and interesting aspects of each idea, and then apply idea enhancement techniques such as Rapid Prototyping to get a better understanding of the idea potential and possible bugs that might impede a successful idea implementation. Using the insights gained, separate the wheat from the chaff at the fine-election gate.

The Fine-Election Gate

During the fine evaluation of each idea, you gained a deeper understanding of the value potential and practical feasibility of each idea. Now it’s time to elect those vital few ideas that deserve moving forward into the actual innovation pipeline. At THINKERGY, we use an Election Tool called Idea Maps that — in a simplified way — works as follows: Construct a 2x2-matrix with “idea potential” as vertical axis (here label the top row “High value” and the bottom row “Low value”), and “Practical feasibility” as horizontal axis (label the left column “Challenging activation” and the right column “Feasible activation”). Now position ideas that have survived the pre-election process in the appropriate matrix-field to determine their fate:

• All ideas that end up in the lower-left quadrant are ideas that are of low value and challenging to implement. Forget about these ideas; they only give you headaches without creating meaning.

• In the lower-right corner, you listed ideas that are feasible to implement but of low value. Beware of the temptation of busying yourself with these low-hanging fruits if you don’t want to create another me-too product or low value product extension that doesn’t allow your firm to differentiate itself from the herd. Filter these ideas out at the Fine-Election Gate, and kiss them good-bye.

• Ideas in the upper-left quadrant have a high value potential but are challenging to implement — perhaps because you lack a certain competence, or because a technology is still too immature, or because regulatory approvals are needed, or because an idea is still ahead of its time. Enter all these ideas into your innovation pipeline, but put them on the Innovation Back Burner.

• In the upper-right corner are ideas that are both of high value and feasible to do. Earmark these ideas for activation in your Innovation Pipeline and move them into the Pitch Pipeline, where it will be decided if and when the idea will be funded and activated.

The Innovation Pipeline

Similar to the idea pipeline, an innovation pipeline comprises various chambers containing innovation initiatives in different states of approval:

• First, keep all innovation initiatives with a high value potential but a challenging activation outlook in your Innovation Back Burner. Moreover, your Innovation Back Burner may also contain those innovation initiatives that were pitched due to a high value potential and practical feasibility, but which have been de-emphasized and put aside for the time being; in a future review cycle, such an innovation initiative may be pitched again and —upon receiving approval— be activated at a later point in time.

• A second chamber in your innovation pipeline is your Pitch Pipeline. Here, you keep track of all innovation initiatives that are going to be pitched to senior management for approval and funding.

• Once an initiative has been successfully pitched and thus received sponsorship from senior management, it enters a third chamber that we call the Activation Queue. Here, all approved innovation initiatives wait until resources (HR and funds) become free for starting their real-life activation.

• Finally, the Activation Pipeline contains all active innovation initiatives, where a project team currently works to achieve real-life implementation. Typically, within a given period, a company can only bring to life a certain number of innovation initiatives. This may be because of time constraints, budget constraints and/or other constraints. Most importantly, however, even the large savvy innovation leaders like Apple or Google focus their attention and money on a few key innovation initiatives in order to make sure that the final value proposition “wows” the market.

© Dr. Detlef Reis 2010. This article was published in parallel in the Bangkok Post under the title “Harvesting ideas from an innovation pipeline” on 27 May 2010.