Presentation "Transparency of Information to Improve Continuous Innovation Experimentation Performance" at Cinet2016.

1. VTT TECHNICAL RESEARCH CENTRE OF FINLAND LTD
Transparency of Information
to Improve Continuous
Innovation Experimentation
Performance
CINet, 11 – 13.9.2016
Susanna Teppola, Petri Kettunen,
Mari Matinlassi, Jari Partanen

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Table of Contents
§ Terminology
§ Introduction
§ Hypothesis
§ Research questions
§ The case
§ Results
§ Discussion
§ Conclusions
§ Limitation and future research

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Terminology
§ Continuous innovation
§ “the dynamic alignment of today’s operational effectiveness and
tomorrow’s strategic flexibility, which can be achieved through
synergistic product and process innovations” Smeds and Boer (2004)
§ Experimentation
§ a way to quickly and incrementally learn about the uncertainties
and to uncover unforeseen items that may have significant
importance for the ideas and concepts (Ries, 2011)
§ Transparency
§ Transparency is an important spur of perfection when targeting at
value creation (Womack and Jones, 2003)
§ Transparency is a way to manage business processes and to
make a process and its status visible (Berner, 2012 and Graupner
2015)
§ Transparency in continuous innovation is about displaying real-
time information, setting specific priorities for activities and
embracing two-sided accountability (Denning, 2011)

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Introduction
§ Continuous innovation is a MUST for traditional technology
companies:
§ Need for rapid and radical business innovations!
§ Simultaneously maintain the current businesses.
§ Challenge:
§ Innovation process is often a separate activity with isolated tools.
§ No resources and time for innovating.
§ Traditional stage-gate model à not easy to participate.
§ Low number, maturity and radicality of ideas.
§ Transparency is mentioned as a fundamental element and
enabler for continuous innovation (Pikkarainen et al. 2011, Denning,
2011)
ØHow transparency actually appears and how it impacts the process
performance?

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Hypothesis
Increasing transparency in the innovation process
Would lead to:
Øbigger number of harvested ideas
Øimproved quality of ideas, and
ØBetter idea fit for the company’s business targets

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Research questions
§ RQ1: How transparency of information is used in the innovation
process?
§ RQ2: How to analyze performance impacts of the practices and
transparency?
§ Exploratory case study (Yin, 2003)
§ Timeframe: May 2014 – Sep 2015
§ Several techniques to collect case evidence:
§ Semi-structured group interviews (2)
§ Monthly meetings to check the status of improvements
§ Documentation of the process, tools and practices
§ Archival records and automatic KPI measurements

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The case company
§ B2B provider of embedded systems for wireless industry.
§ More than 500 employees in four countries.
§ Started agile and lean initiatives in engineering 2007, 2010
§ Stage-gate model used for innovations over 13 years.
§ Main focus has been on IPR process.
§ Wanted agile and lean also in innovation.

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Challenges in the innovation process
§ Challenges in innovation process:
§ Only few ideas per year,
§ slow idea throughput,
§ low quality of ideas,
§ collected ideas did not feed the company roadmaps.
§ It was assumed that employees working daily in operative work
have a lot of good ideas which could support the company’s
business planning.
§ BUT a gap between management who were running the business
cases and specialists who had the ideas
§ Ideas did not get early feedback

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Targets of the company
§ Goals for the company:
Target
#
Description
T1 Harvest more ideas within the company
T2 Grow ideas faster to business innovations
T3 Capture ideas with better fit for purpose
T4 Improve the participation of various company
stakeholders for innovating

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Continuous Innovation process
KPI # Definition
KPI1 Continuous # of ideas
KPI2 # of people participated in the processing of ideas
KPI3 # of ideas in business validation
KPI4 Cycle time of an idea (from idea to demo)
KPI5 Frequency of potential business idea demonstration
Experimentation
and stage-gate
practices
combined!

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How transparency appeared in the process
§ Ideas, their descriptions, attachments, feedback, idea growth,
screening and business decisions continuously visible:
§ Easy participation and seeing feedback.
§ Fast screening decisions available with rationales and feedback.
§ Continuous visibility to idea growth and status.
§ Comments from various experts in the same view.
§ None of the ideas was deleted, disappeared or got obsolete
without a notice.
§ Ideas tool as an integrated part of the company toolchain.
§ Ideas linkable and traceable back and forth from project
management and issue tracking systems.
§ Innovating was made as a company priority.
§ Feedback was pulling more feedback.

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How transparency affected performance
§ Motivation and participation.
§ Evolution of ideas.
§ Common awareness à better focused ideas.
§ Learn from each other.
§ Innovation process continuously accessible à less meetings,
the busiest specialists could participate.
§ Important viewpoints came up much earlier.
§ Ideas with good maturity faster.
§ Validated information to business decisions.
§ Ideas started to connect fast to business cases, their priorities
and issues.

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Performance impacts
§ The most affected KPIs
§ Harvesting:
§ #ideas harvested: not measured à 10-20
ideas per month
§ #people: less than 5% à over 10%
§ Focusing:
§ #people: less than 5% à over 10%
§ Cycle time: not measured à less than 8
weeks (relevance?)
§ Idea demo frequency: 1/month à 1/week
§ Validation
§ #ideas in validation: less than 26% à 35%
§ Idea demo frequency: 1/month à 1/week
§ Cycle time: not relevant in the end.

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Discussion
§ Significant improvements in:
1. Number of ideas
2. Employees participation in the process.
3. Maturity of ideas.
4. Number of business innovations.
§ The company adopted experimental approach in their
innovation, but it was still considered important to keep the
systematic idea handling practices in their process but in a much
more lightweight form.
§ KPI4: When having a lot of ideas in the pool, it was not seen
necessary that all of them should grow rapidly to innovations.
More important was the validity and relevance of the ideas.

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Conclusions
§ RQ1: How transparency of information is used in the innovation
process?
§ it was the way to capture ideas, their feedback and learning so that
none of them got lost or got forgotten
§ Especially when an idea was not relevant at the time of screening,
it was still saved and made visible and traceable in the system.
§ RQ2: How to analyze performance impacts of the practices and
transparency?
§ Paper proposes targets and KPIs for continuous innovation
process, which can be impacted positively when increasing
transparency to the process.
§ These KPIs may be measured when increasing transparency to
the innovation process.

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Limitations and Further Research
§ Conducted and validated in one particular company.
§ The causalities between performance improvements and
practices may not be unambiguous.
§ However, the continuous innovation was new and needed
improvement in the case company, and it gained performance
improvements
§ Customer involvement & continuous innovation
§ Towards Demand-driven innovations
§ What to measure after the positive business decisions

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Questions?
Contacts:
susanna.teppola@vtt.fi
petri.kettunen@cs.helsinki.fi
mari.matinlassi@neone.fi
jari.partanen@bittium.com

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