Innovation Life Cycle / ROI Approach

Wondering 'out loud' why more orgnizations fail to realize real value out of their R&D investments. I developed the following life cycle graphic to illustrate a simple approach to innovation ROI planning. I believe that it is possible to bring some ROI thinking to R&D initiatives and not kill innovation with the process. Could org's use this process to ask questions during the innovation process that prompt thought regarding OH allocation and priorities? Perhaps develop a portfolio of solutions and corresponding business maturity schedules for each? Ultimately of course, the goal would be to achieve a better understanding of opportunities to enhance share value...















The "Y" / Time axis will depend on several factors:

How long will it take to develop the innovation? (Idea/Innovation)
How long will it take to deploy the innovation? (Idea/Innovation)
What is the capture maturity schedule for the projects/initiatives where you intend to use the innovation? (Idea/Innovation + Usage Growth)
How long will it take for competitors or interested external org's to copy you? Above factors 1-3 will determine. (Usage Maturity + Need Decline)

How do you determine Innovation Differentiation Value (DV)?

What are the total costs to develop the innovation?
What are the total costs to deploy the innovation?
What is the size of the "market" that you are chasing?
If supporting an already defined initiative, what increase value will the innovationg bring?
As the solution matures, what are your total costs to maintain the environment?
What is the probability that competitors will develop a similar innovation?
What is the probability that an external org will develop a similar innovation?
At what point in your ILC will a competitor or external org introduce their innovation; and how could this impact your DV?

As usual, please contact me if you decide to use ... I would be curious to hear examples / ideas (shaag)

"Swimming Pool Principle"

Pursuing new initiatives within a large organization and the effectiveness with which you achieve those new initiatives is similar to swimming in a pool...

1. You can swim the lap lanes with everyone else, but these will potentially be crowded - you might have to wait to even get in the pool; and your speed and overall results will be determined by your swimming ability compared to everyone else. If you are a new swimmer you probably won't place, let alone come in first.

2. You can swim under the surface - this will allow you to pursue the initiative without attracting attention, but your speed will likely be hindered, and you will eventually have to come up for air - people might wonder what you have been doing / where you came from.

3. You could ignore the "no running" signs and never enter the water - you will beat everyone to the other end of the pool if you don't slip up, but you might get yelled at, or even kicked out of the pool altogether. People might wonder why "you're not wet like everyone else."