Platt Perspective on Business and Technology

Keeping innovation fresh – 13: understanding the transition committee and its processes

Posted in strategy and planning by Timothy Platt on April 4, 2012

This is my 13th installment in a series on innovation, and on finding and developing paths to bring it to productive fruition within an organization (see Business Strategy and Operations – 2, postings 243, 246 and 248-253, 255, 257, 259 and 261 for parts 1-12.) In parts 1-10, I developed an organizational model with:

• A designated research and innovation center,
• A marketable product and service oriented production and distribution side, and
• A transition committee system for connecting them together.

In Part 11: evaluating innovations and their marketable value and Part 12: risk and benefits analyses in determining marketable value I turned to the innovations themselves, that would flow through this system and I began a discussion of their valuation determination. My goal in this posting is to continue that discussion, turning to the issues of selecting which innovations to move ahead on, and in what order and with what levels of investment and priority.

But to set the stage for that, I want to in effect begin by outlining some foundation issues that go into innovation and its support at a for profit business: the valuation of innovation and the research effort per se.

• I take it as a given that any business that simply seeks to do the same thing and in the same way and without consideration of the changing nature of its marketplace and of their completion, will fail for that. They will drift into irrelevancy and inefficiencies and they will, long term at the very least, see their market share and their business viability evaporate.
• The only exception to this would be in businesses in statically mature industries, in which no participating businesses were innovative and where the marketplace and its consumers did not seek or want newer or better.
• And even there, this stasis could only last until a disruptive, blue ocean strategy came along to in effect yank the marketplace out from under every business currently there – or until the marketplace itself simply dried up and disappeared.

So capacity to create effective, meaningful change through research and innovation, and the implementation of this into production is vital for long-term business viability, as well as for shorter term and here-and-now capture of new market share.

• And I add that in order for a business to be open to successful innovation and change, it has to be tolerant of failure and the inevitability that not every exploratory innovation development effort will succeed.
• And even a product or service idea that works in the lab and in the smaller scale, custom-build context of the innovation center, might not economically or profitably scale up to marketable production – at least now and absent further innovative enablement that would go into making its market oriented production cost-effective.

So I take it for granted, that not all innovations will work even in the research and innovation center, and that of those that do, they will arrive at the transition committee for review as fitting along a spectrum of potential value and viability as new products or services that could be offered through the marketplace-facing side of the business.

• Effective innovation requires a willingness to accept the fact that some innovation expenditures will not work out and that they will appear at least for now as losses.
• Some will offer potential value but not enough at least now for transferring over.
• Some will be game changers for the business as it reaches out to its marketplaces, and
• Some innovations even hold the potential for creating entire new types of business opportunity, and new marketplaces that the innovating business can start out in effect owning.

And this foundation of discussion brings me back to the set of issues I started out stating I will be discussing next, and from a costs and financial predictions standpoint: the selections process that a transition committee would pursue.

I am going to at least begin a discussion of the costs and benefits analyses that the transition committee would process innovation proposals through, brought to it by researchers at the innovation center. I will then look out from the transition committee in two directions:

• First in facilitating the transfer of insight from the market-facing side of the business back to the lab to help the people working there, develop and present the fruits of their labor in ways that would more readily and clearly translate into marketable products and services.
• And second, in reaching out to the market-facing, consumer-oriented side of the business to help them see the realizable potential of the innovations coming to the transition committee – which I add becomes particularly important for the potentially highest value innovations that would form the basis for blue ocean, marketplace creating opportunity.

Thinking back to the two case studies I began this series with: Xerox PARC and Edison’s Menlo Park, a lot of what happened at Xerox PARC that led to Xerox not developing the incredible innovations flowing from it, can be traced specifically to a failure at these two bullet pointed processes (see Part 2: Xerox PARC and Menlo Park and Part 3: Xerox PARC and Menlo Park, continued.) Both of those last two bullet points, I add, cover and even gloss over a great deal of detail that has to be worked out to make the goals noted in them achievable. I will post on them in some detail.

You can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.)

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