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How to be world-class in R&D-driven Early Stage innovation

Currently I am running an exciting project with one of the 30 companies listed on the prime German stock exchange. The client’s question was how to redesign the „technology push“ side of the Early stage innovation (before Gate 1 of the existing Stage Gate process) in a way that it could be a global benchmark.

In order to be world-class, the Early Stage innovation needs to be superior in

  • external foresighting (anticipation of technology trends)
  • internal absorption of the identified relevant trends.

We did some benchmarking and found four main levers for becoming world-class in Early Stage innovation.

Have a clear-foresighting scope, process and tools

Early Stage innovation is an essential part of the whole innovation management. In order to be effective, it needs a clearly defined scope (“search fields”). Defining the scope needs to be done by analyzing the innovation strategy. From the statements made there, the 50 to 150 technology fields that a company is working in will be derived. These then should be continously monitored in order to assess their opportunities, threats and challenges.

More and more, cross-industry innovation is getting attention by corporate innovation managers. This is so because in a large number of industries breakthrough innovations are made by using approaches and technology from other industries. As a consequence, the foresighting scope needs to involve technological progress in other relevant industries.

When it comes to tools, a “technology radar” is a proven tool for visualization and communication of the foresighting results.

Have a suitable well-managed Open Innovation approach in place

Open Innovation (outside-in) itself is being accepted by more and more companies these days. There are several approaches to Open Innovation. Even if one restricts its focus to R&D-driven Open Innovation – as the focus of my project suggested – there are quite a number of ways to go, e.g. building up a proprietary innovation network, innovation ecosystem management or using intermediaries such as NineSigma or Innocentive.

Leading Open Innovation companies have already discovered that a running Open Innovation business process with academia or start-ups requires a specific approach – one that differs significantly from doing Open Innovation with suppliers or engineering companies. Current benchmarks of Open Innovation with academia and start-ups are probably Eli Lilly and the work that Pfizer and Philips are doing on their campuses in La Jolla and Eindhoven.

Invest into absorption capability

All the best foresighting and Open Innovation will not add value of its results are not absorbed by R&D and stuffed into the innovation funnel. First and foremost this is a cultural issue. But there are two more important levers for improvements in this area:

  • Invest into a collaboration platform where internal as well as external ideas are discussed and enriched
  • Establish solid processes and standards (e.g. “How should a concept paper for decision in Gate 1 be written?”)

Install a multi-level management

Managing the Early Stage is a practice that needs to be orchestrated on many levels.

Firstly, three “horizons” need to be managed: Bread-and-butter incremental innovations, Rapid Growth innovations and “Next Big Thing” innovations. Every one of these levels has its won specific metrics and processes and most likely also specific types of people working in them.

Some companies have actually two processes running in parallel in the early innovation stages: One targeted at product innovation and the other one targeted at technology enablers (platforms, advancing pivotal technologies).