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Peter Koen: Workshop "Best of The Best: Learn Top Quartile Practices in The Front End"
Summary from The Front End of Innovation Conference-Europe 2008
Best of the Best: Learn Top Quartile Practices in the Front End
This pre-conference workshop held by Peter A. Koen provided an excellent introduction to the conference topics. Dr. Koen, a director of the Consortium for Corporate Entrepreneurship at Stevens Institue for Technology, chairs the conference advisory board. He characterized his interest in Front End Innovation as the need to find answers to the question, why one sees so little benefits from so much literature and consulting in Innovation Management? His partial answer is: Innovation Management decisions are based on a lot of things other than facts. An evidence-based analysis is needed to foster better management decisions.
As the Front End is about exploration, not exploitation, the key issue of managing it is: How to deal with uncertainties? Traditional stage-gate methods for New Product Development should not be used for that. Instead, a method for New Concept Development is required. It needs to support the circle of NCD stages: Idea Generation and Enrichment - Idea Selection - Concept Definition (Interface to NPD via Concept Selection) - Opportunity Identification - Opportunity Analysis.
The last two are core front end activities. Dr. Koen shared his view about opportunities in mature markets: There is not such a thing as a mature market! There are always opportunities to improve and to innovate.
Taking the example of Apple’s iPod and iPhone innovations, the presenter discussed what makes the difference for an innovation project to be successful.
He presented research results supporting his advice: The single most important variable is senior management’s commitment to the front end. Having a clear innovation strategy is strongly correlated with the FEI success. Effective teams and knowledge sharing are more important than tools and techniques.
Elements of a world-class innovation practice are corporate vision and a strategy involving grand challenges and new platforms. A key core capability is portfolio management: “If you don’t do Portfolio well, you will not have a successful innovation strategy!”
Other methods that worked well: Create platform teams, “Market attack teams” of 3-5 people, and challenge them to drive an opportunity during three months. These teams should include people from business lines, not from a dedicated IM department.
Additional general advice should be followed for innovation projects, too: Reduce the number of projects people are working on. This greatly increases efficiency. Reducing the number of concurrent projects per engineer from four to two projects is equivalent to doubling the engineering workforce. Implementing this measure is challenging. But experience is that it triggers big changes.
Armed with practical examples from Apple, Procter & Gamble and other companies, Peter Koen outlined further management practices which have been proven to increase innovativeness, creativity and market success. These practices cover market research (lead user method, ethnography) as well as organizational issues (“Give focus to people to have effective teams.” “Keep activities looking for disruptive business models separate from those for sustaining business models”, i.e. have an ambidextrous organization). He presented research results proving that “companies which use ambidextrous organization are nine times more likely to create breakthrough products and processes than those using other organizational structures.”
This workshop was packed with valuable content. Dr. Koen impressed by bridging the gap between academic research on innovation effectiveness and hands-on advice for managers.
Chas Martin
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