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)

Can this function as a management tool to groom and encourage staff effectiveness?

Developed this concept / approach for a recent grad school guest lecture that focused on IT professionals gaining a better understanding of P/L drivers, making better decsions, grooming future leaders, etc. Would like to further develop and leverage the concept...

“Norm to the Optimum” Reaction and Related Decision and Action Model

A key aspect of any organization’s growth is the development of future managers and leaders. One of the key traits of an effective executive is the ability of the individual to ensure that the elements of the organization that they are responsible for operate in an efficient, focused manner.

The typical employee does not comprehend the real impact his/her reaction and subsequent decisions or actions can have in any given situation. As an employee matures and increases in effectiveness and decision-making, they tend to operate in a more ‘controlled’ or ‘programmed’ manner. As the employee assumes management and ultimately executive-type responsibilities, they begin to develop a true understanding of the impact of their actions.

An effective employee is in complete control of his/her reactions, and can influence others by “pushing” and/or “pulling” the optimum operational mode target up or down the reaction scale at different stages of the decision event / scenario cycle, in order to achieve the desired outcome.

My contention is that this model can function as a management tool to encourage more effective reactions and decision making. Organizations can utilize this model to reduce over/under unnecessary reaction variance and encourage organizational culture norms that trend to optimum operational values.

Basic scenario:

* An event occurs that causes a reaction and requires a decision;
* The line employee reacts;
* Dependent upon the over/under reaction from the line staff, management attempts to push/pull the decision to the optimum norm;
* Executive input might be required if the initial reaction varied too greatly.

If the initial stages of this sequence were more inline with the optimum norm unnecessary input from management could be eliminated and overall organizational performance improves.

Thoughts??