Simple rules of new solution development
| Standardized process | Case-dependent process | |||
|---|---|---|---|---|
| Ideation phase | Incubation phase | Transformation phase | Industrialization phase | |
| Process rules (How is the process executed?) | A business expert must coordinate the idea. (General Manager, Innovation) |
| There must be a customer for it (the customer must be genuinely interested in it, and it must be validated with the customer) | The solution is entirely entrusted to the business division; it must have cross-functional coordination at this stage, and the business owner is solely responsible for any decisions regarding the solution. (Senior Project Manager) |
| The sale must be closed (the customer needs to buy it) | ||||
| (General Manager, Innovation) | ||||
| Boundary rules (How is the yes/no decision made?) | Based on experience, 90% of the ideas are rejected. (General Manager, Open Innovation) | There must be a potential return on investment of 5 times the initial investment after one year (ROI). 200k €--> 1 M € (worth it) | There must be a potential return on investment of 5 times the initial investment after one year (ROI). 200k €--> 1 M € (worth it). Ten interviews must recommend the idea (different customer segments and locations) (General Manager, Innovation) | The solution must be 1) profitable and 2) consistent with its image (“walk the talk”) (Senior Project Manager) |
| Ten interviews must recommend the idea (different customer segments and locations) (General Manager, Innovation) | ||||
| After ideation, 90% of them need to be killed (Senior Project Manager) | ||||
| Preference rules (How are the opportunities prioritized?) | Evaluation is based on strategic fit, technological feasibility, and business case. (General Manager, Innovation) | Prioritization is based on margins, namely, based on 1) value, 2) cost (including opportunity cost), and 3) urgency. (General Manager, Innovation) | Teams are empowered to make decisions. (General Manager, Innovation) | Resource allocation is based on the solution's gross margin. (Senior Project Manager) |
| Schedule rules (How is the development paced?) | Max. 60 days from submission to decision. (General Manager, Innovation) | 3–6 weeks (after permission from the decision board) (General Manager, Innovation) | Sprints take place over three weeks to show progress. (General Manager, Open Innovation) | Time-to-market dictates resource allocation (the faster, the better) (Senior Project Manager) |
| Stop rules (When should development stop?) | Stop if the idea does not meet the criteria. (General Manager, Innovation) | Stop if the concept does not meet the criteria | Stop if the MVP does not meet the criteria | The solution is abandoned when (1) the customer OR (2) the business case fails (Senior Project Manager) |
| Must be business-driven and led. (General Manager, Innovation) | Stop if sufficient progress does not occur in a given time. (General Manager, Innovation) | |||
| The organizational target beyond the phase | Generate more ideas through an increased number of contributors | Obtain faster results regarding whether the idea is feasible and shorten innovation cycles | Increase firm's clock speed and agility | Increase firm's sales and profitability |
| Prerequisite/the outcome of the process | Idea | Concept and business case | MVP and Business plan, MSP | Smart Solution |
| Standardized process | Case-dependent process | |||
|---|---|---|---|---|
| Ideation phase | Incubation phase | Transformation phase | Industrialization phase | |
| A business expert must coordinate the idea. (General Manager, Innovation) | There must be market demand (business-driven and led) We must be able to execute it It must be worth it (General Manager, Innovation) | There must be a customer for it (the customer must be genuinely interested in it, and it must be validated with the customer) | The solution is entirely entrusted to the business division; it must have cross-functional coordination at this stage, and the business owner is solely responsible for any decisions regarding the solution. (Senior Project Manager) | |
| The sale must be closed (the customer needs to buy it) | ||||
| (General Manager, Innovation) | ||||
| Based on experience, 90% of the ideas are rejected. (General Manager, Open Innovation) | There must be a potential return on investment of 5 times the initial investment after one year (ROI). 200k €--> 1 M € (worth it) | There must be a potential return on investment of 5 times the initial investment after one year (ROI). 200k €--> 1 M € (worth it). Ten interviews must recommend the idea (different customer segments and locations) (General Manager, Innovation) | The solution must be 1) profitable and 2) consistent with its image (“walk the talk”) (Senior Project Manager) | |
| Ten interviews must recommend the idea (different customer segments and locations) (General Manager, Innovation) | ||||
| After ideation, 90% of them need to be killed (Senior Project Manager) | ||||
| Evaluation is based on strategic fit, technological feasibility, and business case. (General Manager, Innovation) | Prioritization is based on margins, namely, based on 1) value, 2) cost (including opportunity cost), and 3) urgency. (General Manager, Innovation) | Teams are empowered to make decisions. (General Manager, Innovation) | Resource allocation is based on the solution's gross margin. (Senior Project Manager) | |
| Max. 60 days from submission to decision. (General Manager, Innovation) | 3–6 weeks (after permission from the decision board) (General Manager, Innovation) | Sprints take place over three weeks to show progress. (General Manager, Open Innovation) | Time-to-market dictates resource allocation (the faster, the better) (Senior Project Manager) | |
| Stop if the idea does not meet the criteria. (General Manager, Innovation) | Stop if the concept does not meet the criteria | Stop if the MVP does not meet the criteria | The solution is abandoned when (1) the customer OR (2) the business case fails (Senior Project Manager) | |
| Must be business-driven and led. (General Manager, Innovation) | Stop if sufficient progress does not occur in a given time. (General Manager, Innovation) | |||
| Generate more ideas through an increased number of contributors | Obtain faster results regarding whether the idea is feasible and shorten innovation cycles | Increase firm's clock speed and agility | Increase firm's sales and profitability | |
| Idea | Concept and business case | MVP and Business plan, MSP | Smart Solution | |
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