Abandon Your Innovation Funnel! Five Steps To Follow Instead To Innovate With Impact

Partner at Venture Idea, a boutique strategy & innovation consulting firm, Researcher at HHL, Business-Author, and Lecturer.

In today’s global, fast-changing competition, small and large businesses alike need to innovate to stay on top of the game. And if you want innovation, you may have an “innovation funnel.” This is a classic tool to manage your ideas and innovate, be it new products, processes or other novel solutions.

In the innovation funnel, you collect all ideas that pop up inside (or even outside) of your organization, and then try to filter (“funnel”) them, hoping that some success occurs after assessing, testing and executing them in decreasing order. But while it may help you to collect and sort a lot of ideas, I’ve found it won’t bring you the innovation you need. Why? It is way too ineffective for today’s fast-changing world. During the time you reviewed 500 ideas, filtered them down to 100, designed 50, tested 20 and executed five ideas, your competitor already scaled their next business. Unfortunately, many companies are not even aware of this fallacy. No wonder that some companies are still unsatisfied with their innovation capability, even though it has been a top priority for years.

The trick lies not in optimizing the funnel, but in killing it. Not only does the innovation funnel not bring the desired impact, it can even cost you valuable time and resources that could be better put to relevant innovation efforts. Based on 10 years of innovation projects in more than 50 industries and my company’s recent research with 30 innovation units, I suggest to do these five things instead:

1. Set objectives instead of opening the funnel.

The starting point for the innovation funnel is usually to ask for ideas. Sometimes specific topics or challenges are given, sometimes they are not. However, in this stage, what the business is looking to achieve often remains unclear, in order to “not restrict creativity.” If instead you provide clear (business) objectives for innovation, all of the following steps can be done to fulfill these goals, guiding all innovation efforts in the right direction.

2. Build a portfolio instead of collecting ‘random’ ideas.

By definition, the innovation funnel collects every idea, as random as it is at first, with the idea that you won’t lose any opportunity. But this leaves very little control over the actual content of the funnel. As output equals input, that leaves innovation impact dependent on the “random” ideas coming. Since no company leader actually wants to execute on just any opportunity, but instead to follow a strategic direction or positioning, a portfolio of actually relevant strategic options should be built first. Define these ideas from a combination of inside and outside views; this can help you to select the most promising fields of action for all following idea generation.

3. Focus early instead of focusing on quantity.

The innovation funnel follows the same axiom as brainstorming sessions, assuming that more ideas lead to better ideas. Unfortunately, in today’s high complexity environment, this is seldom true. Instead of focusing on producing a lot of different ideas, which then need to be funneled as efficiently as possible, I’ve found it is better to focus on the right ideas early on in order to increase effectiveness. But how do we know which ideas are the right ideas? This is where your set objectives and selected strategic options help you to select or develop the ideas that can fulfill your goals best.

4. Ask for input instead of ideas.

To produce a lot of different ideas, organizations usually need to ask a lot of people for ideas — which then rarely get executed, leaving employees frustrated. Since this won’t be required anymore thanks to the focus gained in the previous steps, you can now make better use of your colleagues and ask them for expertise instead. When working on a selected opportunity in a specific strategic option to fulfill certain objectives, people will often happily assist you in finding the best ideas, assessing them or executing them — which highly increases their chances of success!

5. Iterate instead of funneling.

Working on the specific ideas in a portfolio can seem risky — what if they don’t work out? This is where iteration comes in. Instead of spending time to filter and test random ideas, you can now go through small development loops for your focused initiatives, making them work. And if they don’t work, you’ll find out rather quickly and can grab another idea out of your portfolio, knowing that it will be the second-best or third-best option — until sooner rather than later, it will work out.

If you follow these five steps, you will get rid of your innovation funnel. But you will still get the innovation you need: feasible, viable, desirable and with high business impact probability! Is it really that easy? Unfortunately not, because each rule requires dedicated activities and methods to execute them. But as basic principles, they will be a good start to rethink your innovation activities and increase your business impact.

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