Every company needs to innovate in order to survive and thrive. All businesses need to stay relevant, be dynamic and respond to change.

An innovation process is a structured approach to growing your business by making sure that you capture all your ideas, only invest in the most promising ones, and develop your ideas through to launching them in the market. Having just the right amount of structure at the right times, without making the whole process overly burdened by red tape, helps you to focus on better ideas and get more done, more quickly, at lower cost and with less risk.

The key stages in the innovation process are:

•  Having and collecting ideas
•  Selecting the most promising ideas, based on a combination of criteria, such as potential investment and return, feasibility, customer and business impact.
•  Developing the most promising ideas
•  Idea testing
•  Implementation

In practice, projects will toggle between development and testing a few times before implementation.

Between each stage is a ‘decision gate’ or 'stage gate’, allowing you to make a ‘go, no-go, or develop more’ decision when it comes to progressing to the next stage. In between the decision gates, the focus is on doing just enough work and making just enough investment to inform your next ‘go, no-go, or develop more’ decision.

These key stages and decision gates together create the innovation funnel. The highest potential ideas progress through the funnel, with others dropping out once they’ve been explored and discounted.

All businesses - from sole traders through to global corporations - benefit from using an innovation process to bring new ideas to market quickly and efficiently.

Why innovations fail

Lack of innovation process often underpins innovation failure.

Innovations fail principally because either they don’t solve the right problem for customers in the right way (Sinclair C5 in the 1980s), or the customer isn’t aware of the benefits that the innovation will bring.

For innovations to succeed they need to deliver clear value for target customers. This means that customers need to care enough about your innovation and be aware of it for them to be motivated to invest time, money and effort in buying and using it.

Value is one of those words that we use a lot, and means lots of things all at once. In innovation I think of value as meaning three things:

1. Worth, usefulness
2. Values - needs to align with how people see themselves and their ethics
3. A number - time, money

Innovations need to give customers value on all those three, or they won’t buy it.

Innovations fail because they are not sufficiently tested, and / or communicated well enough to customers.

Having an innovation process helps you to reduce the risk of your innovations failing because it prompts you to test your ideas with customers at key stages.

Don’t give up too soon

Innovators tend to move backwards and forwards through the different phases of the innovation process. As we learn something new, we might have to go back a step or even two before we can move forwards again. The result is often the fog of uncertainty, in innovation terms.

When we start on the innovation process we often think that we have got some clarity about where our innovation is going. As new information comes up, we often realise that it’s not as straightforward as we first thought, and the fog of uncertainty descends.

The solution is to move through that fog. It is important to keep trying new angles and problem-solving. Eventually, clarity will emerge. We’ve just got to keep going and understand that the fog of uncertainty is a normal part of any innovation process.

How can you create an innovation process from scratch?

1. Start by getting all your ideas into one place and making sure that everyone in your business knows where they can share ideas that they have in the future.
2. Decide on the criteria that ideas need to meet for you to progress them to the first stage of development. Make sure that the criteria you use aligns to your business strategy and growth plans.
3. Work to ‘lean start up’ principles (Eric Ries). Risk can be reduced by testing and failing as fast and cheaply as possible, getting quick feedback, adjusting and going again.  Action small trials just to test the idea, then decide how you’re going to tweak it and do it bigger and better next time. You might want to do a prototype or a proof of concept, or POC, as it’s also known, to test with some research or focus groups.
4. Don’t innovate by striving for perfection in an echo chamber. Make sure you stop for your ‘go - no go - develop further’ decision after every iteration of your innovation.
5. Build your innovation process into your cashflow planning. There are always exceptions, but usually businesses need to invest before they get a return - so cashflow needs to be planned and managed carefully. If funding is needed, remember that there is usually money found for great ideas, as long as you can tell your story, and tell it with genuine confidence. Monetisation timescales can also be a challenge.

If you’d like to explore how to innovate more effectively in your business, I’ve got lots of free resources available on the innovation process. Have a look at these free articles and YouTube videos that I’ve created.