Page 262 - Grow from Within Mastering Corporate Entrepreneurship and Innovation
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Appendix B 247
Concurrently, new metrics and methods for monitoring
innovation projects and programs were devised, particularly
for the early stages of the innovation process: the so-called
fuzzy front end. Companies instituted formal practices for
generating, collecting, and evaluating new ideas. Phase-gate
(also known as stage-gate) methods became popular, as
researchers and practitioners recognized that innovation could
be rationally managed with deadlines and deliverables, per-
formance tracking, and standardized procedures across proj-
ects. Effective implementation of phase-gate processes
enhanced innovation performance through more efficient allo-
cation of resources, smarter early-stage development, and
greater management visibility into progress. Not that there
weren’t problems. Heavy-handed implementation of such
processes, with metrics that are inappropriate for early-stage
concepts, can prematurely kill promising new opportunities.
For instance, it is often not possible to define the return on
investment of an early-stage concept. Inflexible stage-gate
processes don’t work well for truly new concepts, but well-
adapted stage-gate applications can add significant value. It
takes companies some time to develop the capability at vari-
ous horizons.
As U.S. and European firms implemented and adapted the
quality control and product improvement methods pioneered
by Japanese companies, they began to look for new ways to
achieve competitive advantage, beyond incremental innova-
tion. Unaided, few people are naturally good at thinking
beyond what already exists. Substantial, game-changing inno-
vation often arises from discovering needs that customers don’t
even know they have until they are fulfilled. To develop more
substantial new business concepts, leading companies have
become more deliberate and sophisticated about uncovering
customer needs. Examples include empathic design, ethno-