Innovation Process Implementation

Innovation Process Implementation in High-Tech
Companies
Overview Session
Guy Laliberté, February 2010

This document may contain information which is confidential and can not be reproduced --- Guy Laliberté, 2010

Implementing an Innovation Process

Introduction
■ Innovation in High Technology Companies
■ Many companies focus on Product development and not product innovation
■ They put money in developing products before knowing if the product can become “an
innovation” and be launched with success on the market.

■ Many companies spend money on the development and forget the market
■ They spend a lot of money on designing the technology and forget about launching it.
Resources must be allocated to all aspect of a product and not only the technology.

■ Product Development and Management Association (PDMA)
■ In 2007 : 60 % of firms surveyed in the US are now using some form (partial
or extended) of a Stage-Gate Process for their product innovation. A direct
link has been observed between companies performing well and how far the
Stage-Gate process has been implemented.

■ Innovation must become part of the culture of companies to target growth
■ Product Innovation ≠ Technology Development
■ Rapidly evolving markets require a structured product innovation approach

This document may contain information which is confidential and can not be reproduced --- Guy Laliberté, 2010 2


Innovation in High-Tech Companies
■ Culture of Innovation
■ To be resilient and target growth, a high-tech company must “deeply integrate”
innovation in its culture.
■ A culture of innovation must be present at all levels of the company.
■ Innovation “as a mean of reaching company objectives” must be understood and part
of the strategic and operational plan of the company.
■ Innovation is more then “new technology = new product”. A product is more then only
technology (technology + commercial spin + price)
■ Innovation can be only “internal” and still impact results on the market (i.e. : implementing
new processes or equipment to reduce cost and thus price of a product on the market)

■ Key Factors
■ First step is to work on “integrating” innovation in the culture of a company. From the
executive to the middle management, all must obliged by it.
■ Key to innovation is the collaboration between marketing and engineering.
■ An invention badly launched on the market will never become an innovation.
■ You can have the best technology but without the adequate means to target the right
markets, you will not succeed.
■ Understanding the life cycle of a product is key in taking decisions for success.
■ More and more innovations are “completed with external means” such as partnership
and use of third party technologies.



Stage-Gating Model A structured innovation approach

Discovery

Initial Idea
1 Screening

Business Test &
Scoping 2 3 Development 4 5 Launching
Case Validation

Go to Go to Go to Go to Launch
Business Case Development Test & Validation

Post Launch
Review

2 Gate : A decision point in the product innovation process

Stage : An activity of the product innovation process.



Stage-Gating Model
■ The Stage-Gating process is:
■ a way to formalize and structure the innovation process within a company;
■ a way to reduce financial risk for the companies
■ a way to increase chances of success with the new product
■ a way to have the buy-in of all stakeholders within a company

Discovery

1

Business Test &
Case Validation

Post Launch
Review



Stage-Gating Model Discovery

1

Business Test &
Case Validation

■ Gates Post Launch
Review

■ Gates are positioned at key decision points in the product innovation process
in order to make an assessment of the project.
■ Questions (to be answered are each gate)
■ Quality of execution : Was the previous stage executed with the required
quality level ?
■ Business Rationale : Is the project still attractive on an economic and
business perspective ?
■ Action plan : What is the action plan and the required resources to
perform the next stage ?

■ Decision (to be decide are each gate
■ At each gate the decision can be : Go, Kill, Hold or Recycle

■ Structure
■ Deliverables : What was delivered by the project team following the
previous stage.
■ Criteria : Metrics on which the project is judged for the
Go/Kill/Hold/Recycle decision and projects are prioritized.
■ Output : Result of the gate review (Go/Kill/Hold/Recycle); an action
plan for the next stage; a list of deliverable for the next
gate and a date for the review.




1

Business Test &
Case Validation

■ Stages Post Launch
Review

■ A stage is a predefined step in the product innovation process:
1. Discovery
2. Scoping
3. Business Case
4. Development
5. Testing & Validation
6. Launching
7. Post-Launch Review

■ A stage is executed based on the action plan decided at the previous gate.

■ A stage is a set of cross-functional and parallel activities performed by a team
of people from different functional areas in a company.

■ Approach
1. A stage is composed of activities (done by the people from the functional areas)
2. These activities are integrated in a common analysis
3. The result of this analysis is outlined in the deliverables for the next gate.



Discovery

1

Business Test &
Case Validation

■ Stage 0 : Discovery Post Launch
Review

■ The first step in all innovation project is to have an idea on what
to work on.
■ Idea Generation Activities Not all companies have
■ Stimulate creativity formal activities to generate
■ Brainstorming product ideas but ways exist
■ Group Thinking exercise to stimulate creativity…

■ Look internally for ideas
■ Management team
■ R&D Experts and Designers
■ Testing Engineers
■ Manufacturing Technicians
■ Etc.

■ Look outside the company for ideas
■ Customers & Lead Users
■ Suppliers
■ Competitions
■ Products outside the company normal market
■ Etc.




1

Business Test &
Case Validation

■ Gate 1 : Post Launch
Review

This gate is to formally present an idea to the executive
team to get the authorizations to proceed with the first
stage Scoping 1

■ Stage 1 : Scoping
■ Evaluate the idea Scoping
■ The product itself
■ The targeted market
■ The business opportunity

■ What are the product strengths & weaknesses ?

■ What would be competition ?
■ What are they doing ? Their current focus ?
■ In which market ?
■ What could be the threat ?

■ Why should the company invest in this idea ?




1

Business Test &
Case Validation

■ Stage 2 : Business Case Post Launch
Review

■ Step 1 : Product Definition and Analysis
■ What creates value for the client ?
■ Market Analysis (size, segmentation, trends, sales channels)
■ Competitive Analysis (Technology Gap, Market Share, Business Strategy) Business
2 Case
■ Technical Concept (PRD)
■ Current Patents Analysis (which patents could have an impact ?)
■ NRE + Manufacturing + Product Launching Costs Estimates

■ Step 2 : Building the Business Case
■ Result of Step 1
■ Legal & Regulatory Requirements
■ Health, Safety and Environment considerations
■ Assumptions used for the analysis & Out-of-bounds criteria
■ What is the window of opportunity ? (how much time do we have ?)

■ Step 3 : Building the project plan
■ Schedule, Budget and required resources
Very difficult stage
■ Step 4 : Feasibility Review based on anticipation and
consuming a lot of resources




1

Business Test &
Case Validation

■ Stage 3 : Development (technology & marketing) Post Launch
Review

■ Execute what was decided in the previous stages
■ Focus on the technology and align the marketing
■ Do not forget to develop your manufacturing process
■ Do not forget the Maintenance, Support & Logistic Approach 3 Development
■ Perform specific pre-launch activities
■ Define key milestones for interim decisions/re-alignment

■ Use a structured technology development process
■ V-Model or else
■ Keep it as lean as possible
■ Use people from all areas of the company
■ Engineering, Production, Procurement, Logistics, CM, Etc.

■ Use a structured project management process
■ Project Management Institute (PMI)
Execute what was previously
decided and planned
■ Use prototypes to validate concepts
■ technology and marketing



1

Business Test &
Case Validation

■ Stage 4 : Testing & Validation (technology & marketing) Post Launch
Review

■ Evaluate what was done previously
■ The technology itself
■ The manufacturing process & approach
Test &
■ The maintenance and support concept (ILS) 4 Validation

■ Evaluate customer acceptance
■ Use lead user or key customer to get their inputs

■ Fully test/validate what was done
■ Near Testing
■ Test the product including the technology (bugs)
■ Field Testing
■ Have it tested by customers (in a controlled environment)
■ Market Testing (optional)
■ Test your launching plan in a controlled market
■ Only required because you have doubts could jeopardize your strategy by giving
information to your competition !




1

Business Test &
Case Validation

■ Stage 5 : Product Launching Post Launch
Review

■ Finalize and execute the marketing strategy
■ Create market awareness
■ Generate market demands (before launch)
■ Announce launching date 5 Launching
■ Finalize collaterals
■ Have adequate and sufficient marketing units to support
market requests
■ Last chance to decide on the price !!!

■ Train the sales channels (internal & external)

■ Train the support team

■ Manufacture your initial production run
■ Based on the anticipated market share
■ A mitigation plan is a good idea if you have more demand
than anticipated.




1

Business Test &
Case Validation

■ Stage 6 : Post Launch Review Post Launch
Review

■ Review if the project/product objectives have been reached in
order to have a continuous improvement approach.
■ Objectives
■ To instill a culture of accountability for results Post Launch
■ Use metrics for all team members Review

■ To have performance metrics measuring how well a new product
project performed
■ Are the profits on target ?
■ Was it launched on time ?

■ To build-in learning and improvement
■ Focus on fixing the cause rather than putting a band-aid on the
symptom, or worse, punishing the team.



Stage-Gating Model Adaptation & Flexibility

Business Test &
A Scoping 2 3 Development 4 5 Launching
Case Validation

Scoping & Development Post Launch
B Discovery 1 Business Case 3 & Testing 5 Launching
Review

Scoping & Development,
C Business Case 3 Testing & Launch

A Major New Product Development
B Improvements & Modifications

C Sales Forces & Marketing Requests


References
■ Winning at New Products: Accelerating the Process from Idea to Launch
■ Author: Robert G. Cooper

■ Product Innovation and Technology Strategy
■ Author: Robert G. Cooper & Scott J. Edgett

■ Strategic Business Planning
■ Author: Geoff Linton

■ Diffusion of Innovations
Authors: Everett M. Rogers


Innovation Process Implementation

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