What are the most important phases, activities, deliverables, and decision points in the innovation process for new services? This workflow gives you the overview. Below, I also address common failure points in this workflow and the associated problems, consequences, and solutions so you can avoid them.
The workflow of the innovation process
In the workflow, you see various clouds. These represent the phases of the innovation process:
- Define the project
The innovation process is far from linear. Most iterations happen within these phases. On occasion, you may need to pivot and/or go back to a previous phase if you find yourself on a dead end.
Key decision points / project milestones
The workflow is interrupted by key decision points or project milestones:
- Approval to explore
- Obtain funding
- Find beta tester(s)
- Obtain paying client(s)
- Decide to scale
These are the typical major go / no-go decision moments on the innovation journey. Within each phase and prior to each of these key decision points, there may be smaller and more project-specific milestones upon which further funding will be contingent.
I have tried to give realistic timelines for each of these decision points in the workflow below. However, timelines can vary greatly, as it matters if you are working full or parttime on your project, how big your team is, and the complexity of the new offering. The timelines below are therefore rough indicators of minimum and maximum timelines only, based on our experience and teams in our T4 accelerator program:
- Approval to explore (parttime team, 2 people, 2-8 weeks)
- Obtain funding (parttime team, 2-4 people, 8-26 weeks)
- Find beta testers (fulltime team, 2-4 people 8-26 weeks depending on the complexity of the solution)
- Obtain paying client(s) (fulltime team, 2-4 people 8-15 weeks, for very novel solutions this can take much longer)
- Decide to scale (25-52 weeks)
Common failure points
Last but not least, where do we see things fall apart in this workflow and how to avoid these common failure points? To be clear, with failure I don't mean the bubbles in the workflow that read 'end project'. Those are successful outcomes, with the organization learning what not to do.
Where things go wrong in the innovation process:
1. Giving too soon approval to explore
- Teams moving too fast through the first two phases focusing on producing outputs, without taking the time to get buy-in from the organization for their project.
- It makes it look like the project team is doing great. Yet, when it is time to obtain funding, the team will figure out the hard way that there is no support for the project, their proposal gets rejected, and all efforts have been a waste of time.
- Make sure you take the time early on, to create buy-in for your project.
2. Obtaining approval for half-baked project plans
- Teams moving undisciplined through the ideate phase, producing half-baked plans that are written based on guesses, assertions, and filled with untested assumptions.
- For an organization, it is risky to invest in a business case proposal full of untested assumptions and assertions. Consequently, decision-makers will provide minimum funding to such projects, barely enough to keep the project going. It means that the team has to proceed with minimum support and funding while doing the testing and work they could and should have done beforehand. The (seemingly) lack of progress means that such a team often will quickly lose momentum and the project will slowly fade from the radar screen. A loss for everyone involved, especially when it involves a promising project.
- It works better to invest the time upfront to create a substantiated plan. That is, put the time and effort in defining and testing the problem and customer needs while creating the business case. That way decision-makers are better informed and can make better investment decisions. Properly funded, teams can then go out full-force, to test the remaining most critical assumptions during the development phase.
3. Foregoing scaling
- Glad to have made it this far, the team celebrates its success of the first paying client(s). While it is important to celebrate reaching this milestone, it should not indicate the end of the innovation process. Scaling is where the money is made and the return on investment is earned.
- Often, the team that brought the new service to market, is not interested in repeating what they have developed. They prefer to start something new.
- The return on investment from innovation activities is too low, making the innovation process unsustainable, and preventing future investments in innovation activities.
- Make scaling an integral part of the workflow, yet realize that building out an existing service may require a different skillset and team. Adjust innovation teams that have gotten this far accordingly.