Program Director, Advanced Innovation
Philips, Sleep and Respiratory Care
New Innovation Language and Process
When I started in innovation, it was common to research a problem, build a prototype, test a limited number with consumers, and then promote the concept into the traditional commercialization process. The commercialization process, however, was for products that had a known customer segment, distribution system, go-to-market strategy, and a dedicated sales force that understood a known technology…and often new innovations failed.
When an innovation comes through with many unknowns (market, technology, etc.) the commercialization process is not very helpful with solving the unknowns. The process our business used does not address how to mature a product or determine if the business should continue to invest in the concept. As a result, our innovation team took a step back last year and put a new system in place that focused on learning about a new concept.
The new system includes a different governance structure, a new stage gate process, ways of working, new support tools and vocabulary. The governance structure is a mix of people inside and outside of our company. The external group includes those with backgrounds in venture capital, startups, or incubators. This external group brings evaluation skills and knowledge to the table to help look at ideas in a different way. The new stage gate process includes phases that help the innovators mature ideas along with check points with our governance structure to assess viability, funding and concept development.
Emphasis on Learning
When exploring a new idea with our new system, a small cross-functional team of marketers, engineers, and clinical researchers come together to discuss the idea. This session focuses the team to identify knowns and unknowns in four main areas: the market, technology, clinical efficacy, and organizational fit. The output of this session is to create a list of critical-to-know items about the concept. The team then prioritizes the list, decides what items are high-risk, and creates a plan to tackle the riskiest items first.
Generally, the exploratory team does two four week sprints, with a maximum of 1-2 experiments per sprint. The goal is to learn quickly and determine if we should pursue, pivot, pause or exit this idea. The first steps of exploration often focus on high risk areas with carefully thought out experiments. Experiments may include: desktop research, talking with colleagues or experts, and evaluating successful or failed concepts from the past. If the team does not understand the market, they may do online tests, surveys, or ethnographic studies. Once the results of the experiments are back, the exploratory team determines if they want to pause, pivot, pursue or exit. If they decide to pivot or pursue, the team then re-assesses the critical-to-know list previously created, adds new items if necessary then identifies the next critical items to assess. It becomes a rinse and repeat cycle for several sprints.
Ideas may stay in this phase for about two or three months. As the team thinks about getting ready to exit this phase, they would start to have a strong idea about who is the market for this new solution, what technology options are available, the benefit they are looking to create, and organizationally, if it fits into the business portfolio. The goal of learning quickly allows people to dig deeper into the idea to again consider pause, pivot, pursue or exit. In the past, this was the one missing piece in the commercialization process. Now, we follow a process that includes quick learning experiments, identifying critical missing pieces and evaluating our ability to mature a concept.
The tools teams use during this early phase are a Project Charter, Value Proposition Canvas, Experiment Canvas, and Experiment Maps. Each tool enables the teams to document the experiments, document assumptions and translate learnings related to the initial idea or solution.
Pause, Pivot, Pursue or Exit?
While maturing an idea, many options exist related to utilizing the work that has been completed during ideation or incubation (our phase to mature a concept before moving into commercialization). As mentioned above, teams often think about pivoting a project, pursuing or stopping the project. They also consider how to exit or transition this idea out of the new system. Not all projects may get transitioned to our core business. So while maturing a concept, the teams consider other transition options. Options can include; exploring an area to build an IP portfolio, explore who to partner with to build the product, or potential acquisitions versus building. There are many avenues to explore while in the idea/incubation phase. Here is where we define and keep the end in mind.
Common tools used during the maturing phase include: the Business Model Canvas, a Maturity Matrix, and an Attractiveness Matrix. These tools compliment traditional items like a Business Case, Product Requirements and Competitive Analysis. The Maturity Matrix helps identify how mature a project is from various aspects including: technical feasibility, value proposition definition, market identification, viability, and organizationally. An Attractiveness Matrix looks at strategic alignment, customer desirability, ability to win, market attractiveness, technical feasibility, operational benefit, and financial benefit.
Final Check: Delivering Value
Many great tools exist to support entrepreneurs starting a business or those looking to innovate in a new space. I have found that networking with those involved in innovation and sharing best practices internally is the most beneficial way to help our innovation team keep learning, growing and most importantly, delivering value to our company.
Sharon Baer is currently a Program Director in the Advanced Innovation Team for the Sleep and Respiratory Care division of Philips. Sharon has acquired extensive experience in the area of Strategy and Innovation over the last eight years. Prior to working in Innovation, Sharon was the Manager of the Clinical Marketing Organization and Program Manager for the North American Sleep Market within Philips. Before Philips, Sharon worked in Healthcare at the University of Pittsburgh and Education at Naugatuck Valley Community College. Sharon holds a Master’s Degree in Business Administration and a Bachelor of Science in Respiratory Therapy.