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A New Framework for Disruptive Innovation Management 2012 - Dr. Jose a. Briones
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A New Framework for Disruptive Innovation Management 2012 - Dr. Jose a. Briones


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Product innovation has been described as the way out of today’s difficult business environment. However, the rate of success of development projects, in particular white space or disruptive …

Product innovation has been described as the way out of today’s difficult business environment. However, the rate of success of development projects, in particular white space or disruptive innovation projects remains too low.
We believe that a reason for the low success rate is the erroneous application of methods designed for incremental innovation like Stage Gate to projects with high levels of uncertainty. In this presentation we will discuss the different types of development projects based on degree of uncertainty, and the creation of different project tracks. Projects are managed using different tool sets based on the best fit between information available and decision making needs.

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  • 1. Beyond Stage-Gate®:A New Approach to Manage Radical and Disruptive InnovationProjectsin an Environment of High UncertaintyJose A. Briones, Ph.D.SpyroTek Performance Solutions, Dallas, TXSummaryProduct innovation has been described as the way out of today’s difficult businessenvironment. However, the rate of success of development projects, in particular white spaceand disruptive innovation projects, remains low.This low success rate can be attributedin partto the erroneous application of methods designedfor incremental innovation to projects with high levels of uncertainty. Common approaches tothe management of innovation projects, like Waterfall or Stage-Gate, follow a linear approachthat does not provide the flexibility needed for disruptive innovation to be successful.The key to success in disruptive innovation is the use of a strategy that reconciles oppositeneeds: flexibility and control. A framework of controlled iteration can provide the right level offlexibility while at the same time give management the information required for properallocation of resources.The need for new approaches to the management of innovation projectsled to thedevelopment of the SpyroTek System. This method applies a true spiral approach to market andbusiness development. In addition, development projects are classified based on degree ofuncertainty and managed along different project tracks. Finally, different tool sets are usedbased on the best fit between information available and decision making needs.The SpyroTek System preserves the metrics needed for measurement of project progress, butalso provides the flexibility needed for high uncertainty innovation projects to succeed.SpyroTek Performance Solutions @Brioneja
  • 2. Problem StatementRecent examples such as Blockbuster, Borders, Kodak, Nokia and Blackberry show thatinnovation has become a matter of life and death for companies today. But innovation may becostly.Dr. William Strauss of FutureMetrics has documented that the ratio of R&D needed per unit ofGDP output has gone from 1:1 in the early 90’s to ~3:1 in 2009. This increase can be attributedto the fact that the rate of success of innovation projects, particularly radical or new marketinnovation projectsrarely exceeds 20% and may be as low as 2.5%.Referring to classical innovation management processes such as Stage Gate, ClaytonChristensen, author of the book “The Innovator’s Dilemma”, has stated: “The Stage-Gate system assumes that the proposed strategy is the right strategy; the problem is that except in the case of incremental innovations, the right strategy cannot be completely known in advance. The Stage-Gate system is not suited to the task of assessing innovations whose purpose is to build new growth businesses, but most companies continue to follow it simply because they see no alternative.”Christensens observation reflects the need for new management approaches that increase theprobability of success, but at the same time preserve the metrics required for measurement ofprogress and resource allocation. The challenge is then to reconcile a formal managementframework with the flexibility that is needed for innovation to thrive.The Need for Iterations:To develop disruptive innovations, 1 round of voice of the customer is not enough to be thecornerstone of a project. This is because customers cannot say that they want what they donot know, and can only provide feedback on incremental modifications on what they do knowThe SpyroTekSolutionThe solution to this challenge consists of3 parts: 1. Classifying projects according to the degree of uncertainty 2. Adopting a controlled iterative process to discovery 3. Using the right analysis tools that correspond to the level of uncertainty at each level of the spiralSpyroTek Performance Solutions @Brioneja
  • 3. The practical framework that incorporates these solutions is show in Figure 1 below. Resources Launch Quadrant IV Quadrant I Roadmap/Timeline Level Idea Generation Risk Analysis 3 2 VOC Customer Testing 1 Time Time Technology Supply Chain Assessment Analysis Business Value in Use Case Analysis Regulatory Quadrant III Prototype IP Strategy Quadrant II DevelopmentTime is the X axis, resources is the Y axis. Center = 0 for both, thus they both grow from the center. This is visualway to indicate that time and resources allocated should be low for level 1 projects and grow as more information isobtained and uncertainty is reduced.Keys to the Process: Time and resources start small, increase as the project advances through the spiral The analysis is repeated at each level, but the tools used for each level are different. o Level 1 uses tools more suitable for high levels of uncertainty, i.e. Discovery Driven Planning, Probabilistic Decision Analysis o Level 3 uses more conventional management tools, i.e. Linear Stage- Gate, Agile, NPVSpyroTek Performance Solutions @Brioneja
  • 4. Benefits of the Spiral Approach:The use of this framework offers the following advantages compared to traditional linearinnovation management systems: • For disruptive innovation projects iterations are needed where customers evaluate a prototype and a new cycle starts, complete with a new VOC, market and business analysis. This framework allows for the iterations to occur in a controlled manner; • The use of this framework, combined with the right analysis tools, allows for effective financial forecasting even in the early stages of the innovation project where uncertainty is high. • The initial iterations, where uncertainty and risk are high (represented by the inner spirals on the chart) can be completed quickly and at low cost. Ideas can be rapidly promoted to the next iteration – or discarded. • The controlled iteration approach provides a way to properly define the right value for the product or offering, leading to more accurate price estimates. • In this framework, allocation of time and resources starts at low levels. These increase as the levels go up and the uncertainty is reduced, thus minimizing risk. • This approach does not compare incremental innovation projects to radical innovation projects in the early stages, a classical mistake made by established leaders which results in the early kill of radical innovation projects.This framework for the management of innovation projects provides the flexibility needed forsuccessful innovation projects in any industry and the metrics needed for proper measurementof progress and resource allocation.By utilizing this approach, managers insure that radical anddisruptive innovation projects have a chance to prove their benefits and create the innovativeproducts and services that companies need to remain competitive.This methodhas been used to successfully introduce a disruptive innovation product to theconstruction additives market in Europe, and has been presented at numerous conferences andwebinars to very positive reviewsResourcesA short video that summarizes the Beyond Stage Gate framework for innovation“Beyond Stage Gate” Framework Presentation® is a registered trademark from Stage-Gate International’s Product Development Institute Inc.SpyroTek Performance Solutions @Brioneja
  • 5. BioDr. Jose A. Briones is currently the Director of Operations of SpyroTek Performance Solutions, a supplierof innovation management and support services. Dr. Briones also holds managerial and board positionsin the following companies: SPOTSTracking Systems, a developer of workflow management and ordertracking software for small businesses, Smarty-Ears LLC, a developer of iPhone Apps for Speech Therapyapplications, Green Chemistries Corp., a supplier of hypoallergenic Natural Rubber, and CeleritasChemicals, a supplier of specialty chemicals for the Oil and Gas industry. He is also an Advisory BoardMember of the DFW Product Group.Dr. Briones has 20 years of commercial and technical experience in the manufacturing and technologyindustries, holding positions in the areas of marketing, innovation, sales, engineering and R&D withFortune 300 companies such as Celanese, Air Products and Reichhold. His experience also includesmanagement of custom manufacturing companies and software startups. Dr. Briones has been thecommercial or technical leader in the launch and commercialization of over 35 new products for avariety of applications and end use segments. He has been named as inventor in 6 different patents.Dr. Briones has a Ph.D. in Chemical Engineering from Clemson University and has an Executive MBAfrom Wharton Business School. His expertise and experience includes: Innovation Management,Product Development and Ideation, Business Model Assessments, Product Portfolio Value Analysis,Probabilistic Forecasting Decision Analysis and use of Social Media to achieve Social Change.Recent Publications “A New Approach to Innovation Management”. Video submission to semifinals stage of Wharton/Wipro Innovation Tournament. 2011 “My Boss Told Me to Get the Voice of the Customer, Now What?” Presentation at ProductCamp Austin – 2011 “Quantifying Uncertainty in Innovation Project Management” Presentation at 2010 Risk Conference, Applications and Training - 2010 “Beyond Stage-Gate – A New Approach to Innovation Management”. Presentation at ProductCamp Austin – 2010 “Value in Use Analysis and Strategy for Product Introductions” – Presentation at Product Camp Austin - 2010Recent Patents Additive composition for mortars, cements and joint compounds - Dec. 2009 Methods for incorporating polyvinyl alcohol particles into products – Jun 2009Contact InformationBrioneja@SpyroTek.comSpyroTek Performance Solutions @Brioneja