The Innovation Deployment Process

Only two months ago we started our journey in the world of innovation, talking about abstract concept about innovation. Then we analyzed the role of design in business with the innovation process and today, we are here for the last step. We went through the bottle neck and now we are in the real world. We are where “design needs business”, and precisely we will talk about the innovation-deployment process. The word process in this case does not emphasize the sequentiality of different steps, but it deals with the connection of different aspects that together contribute to the deployment of an innovation. 

Some of the main concepts

The innovation deployment process finds its declination in the life-cycle concept. This biology concept is applied to the innovation deployment to give the idea of a dynamic process. “Everything that grows, dies”. The most spoken words in innovation classes during this last part of the course. This is the reason why design needs business: the application of rational business steps are vital for reaching a sustainable level of innovation over time avoiding the “death” of the innovation itself.

The product/service life-cycle is a sociological theory that describes the diffusion of innovations among society through the concept of adoption. According to this theory the adoption of innovations could be observed from 3 different levels: micro, meso, and macro.

The micro level is about individuals, describing the stages of the adoption process from first exposure to an innovation to the decision to continue using it. 

The meso level deals with groups of individuals that are differentiated according to the speed with which they adopt an innovation. Precisely there are five adopter categories (innovators, early adopters, early majority, late majority, and laggards), whose distribution over time follows the normal distribution. 

Adoption Curve

As we can see from the picture, a big gap, called “The Chasm”, exists between the early adopters and the early majority. This is a critical point that could be seen as an ulterior filter: if the innovation overcomes The Chasm, it will become a mainstream. 

This moment is critical in the innovation life and to better understand it an analogy with Gladwell’s Tipping point is interesting. In this book, he explains how the World could be seen through social epidemics, where human behaviors are like viruses that when hit the Tipping Point start to expand exponentially among the society. Similarly, if an innovation hits the Tipping Point, it will be able to become a mainstream and start a “positive epidemics”, overcoming The Chasm.

The macro level puts the two previous levels together and relating the adoption to the diffusion of innovations. The latter is mathematically represented by the S-curve, which relates the increasing level of adopters to the saturation of the market share.

The S-Curve and the Adoption Curve

The S curve describes the diffusion of an innovation, but it also clearly shows that “everything that grows dies”, because after the saturation of the market-share is reached, the decline will eventually starts. Then, how is it possible that successful companies like P&G have been on the crest of the wave for so many years?

The answer lies in their ability to continuously innovate, creating and taking S-curve after S-curve. To this regard, the Tipping Point comes as an extremely useful tool. As a matter of fact, the creation of another S-curve has to occur in a very precise moment: when the previous innovation hits the Tipping Point. Even though it could seem illogical, that is the moment where something that used to be unique becomes a main stream and therefore a company has to start innovating again.

S-Curves

Talking about companies, it is interesting to notice that the life-cycle concept fits also with businesses. Precisely, Frank Demmler identifies four stages: Embryonic, Growth, Maturity, and Decline. For us the most important is the Embryonic stage, because it occurs right after the bottle neck has been overcome and it is critical for the entire life of the business, considering that this evolutionary stage sets the business’ basis.

This stage consists of 5 phases (Idea, Feasibility, Verification, Demonstration, and Commercialization), and despite the common belief that sees this stage as a quick one, research showed that it may last up to 14 years. These phases are sequential and they have increasing levels of investments needed, and the goal is to constantly reduce uncertainty to maximize the probability of success, while the venture moves foreword. Even though there is sequentiality, commercialization is the most risky and critical phase requiring the highest investments (Demmler Frank).

Cash needed-risk-phase relationship

At this point, careful readers should have in their minds questions like the followings: “So, we talked about innovations, ventures, life-cycles, and phases; but, what about money? How is it possible to finance a venture and its necessities?”

Well, to answer these questions it is important to identify the connection between the phases and the funding sources. In particular, this relation is driven by the risk and uncertainty perceived of a successful commercialization. Moreover, the most utilized forms of funding could be divided into 2 categories: debt and equity. The former, often in its institutional form (venture loan), is usually concentrated in the last phase while the latter is used in different phases according to its form: Angel Investors, who are private wealthy investors, are focused on the intermediary phases while Venture capitalists, who are investment managers and therefore not owner of the money invested, are usually much more focused on the commercialization phase. 

Types of funding

Enlarging our perspective it is possible to identify many other funding ways. For example, a model that is obtaining increasing recognition and popularity is corporate venturing. According to Kelley Starr, “Corporate venturing is the strategic allocation of a company’s resources to purposefully start new businesses”. More precisely, corporate venturing is internal when new businesses are started within the parent company, while it is external when the parent company directly or indirectly invests in independent start-ups (Starr Kelley, 2007). The advantages of having a parent company supporting innovations are extremely high, especially considering that in this way not only uncertainty and risks are mitigated, but also the funding itself becomes a much less important problem to overcome. On the other hand, the parent company benefits from the innovative waves that output from corporate venturing. If I were an employee in such companies, I would definitely find a trustful environment, where people would feel free to make proposals and work on their ideas. As a matter of fact, we should not forget that We, the People, are the main source for innovations and therefore it is extremely important for a company to give the right amount of freedom for employees to think outside of the box.

Corporate Venturing

An ultimate concept that is involved in the life cycle of both innovations and ventures is the intellectual property (IP). 

In our case, without going into much technical details, it is important to be aware that there are different types of IP and that each one is used according to the subject and to the stage of the innovation. So for example, Trade Secret focuses on the protection of intangible sources of competitive advantage such as ideas, information, and know-how, and it is likely to be used in the early stages of the venture life-cycle. Instead, other types of IP such as Patents, exclude others from the actual manufacturing of tangible compositions, and therefore it is likely to think that they would be utilized when there is the concrete chance to go into the market.

In general I believe it is worthwhile to share a brief reflection about the role of IP in the “West”. Our society puts a lot of emphasis on protecting ideas, justifying this choice in the fact that otherwise the entrepreneurial spirits would be limited by the risk to see innovations stolen or dispossessed. So, considering that innovation is commonly recognized as the engine of economic growth, it becomes extremely important to set the most suitable conditions to let the entrepreneurial spirit bring innovations to life, and IP has a critical role in this process. However, it is important to balance IP with the fact that the best innovations have origin not from a single person, but from a group of people. Therefore to reach a sustainable level of innovation for the future generations it is necessary to have IP laws that do not limit the power of sharing ideas.

       - Michele Bellini -

Communication and Innovation

Welcome back wonderful Folks!

Today I would like to share with you some insights I have recently developed about the connection between Innovation and Communication. 

I just followed my inspiration and let the virtual pen flow on the paper. 

I hope you will appreciate it.

Good Reading!

When speaking about creativity, new ideas, and innovations, we oftentimes forget to take into account communication. According to Oxford Dictionary, to communicate means to “share or exchange information, news, or ideas”. During this process of sharing, mistakes are likely to happen either in the form of misunderstandings or misconceptions. Thus, it is critical for human beings to actually express themselves, minimizing the likelihood of mistakes when communicating ideas to the external world. As a matter of fact, there is no more ineffective idea than the one that stays in your mind and even worse, than the one that is misunderstood by the people who should support it. The issue gets really critical when ideas are new and therefore, something people have never thought about before. Hence, the question is: how  can communicating new ideas be effective? In other terms, how is it possible to guide people out of their categories? The answer I would like to give today lies in the past.

Two thousands years ago, in Palestine, one of the greatest innovators in human  history was teaching revolutionary values and principles. What would have been “western society” had Jesus been a bad communicator? Fortunately, not only was Jesus an innovator, but also a master in communication. During his preaching, his main audience was composed of no more than simple shepherds and fisherman, who did not have any kind of knowledge of the world outside of their “area of specialization”. These reasons forced the Messiah to use a very effective communication tool, which became also one of the most characterizing method of his preaching: the parable.

The word parable comes from a greek terms meaning “comparison, illustration, analogy” and the third meaning is the one I would like to focus on today. Jesus used this type of analogy adapting his revolutionary message of love and salvation to the specific context he was living in. One of the most famous examples is Matthew 4:19 in the New Testament. Jesus has just started preaching in Galilee when he encounters the fishermen Simon Peter and Andrew. To call the couple to join him he says: “Follow me, and I will make you fishers of men.” Another clear example is the famous Parable of the Lost Sheep, where Jesus talks about a shepherd who left his flock of 99 sheep in order to find the one sheep who is lost. The Gospel is full of analogies like these, perfectly related to the cultural and historical framework of 30 A.D. Palestine.

The greatness of Jesus as an innovator as well as a communicator was his ability to literally take his people’s hands and guide them out of their categories by using categories themselves as the starting point. As a matter of fact, an effective innovator uses analogies and metaphors linked to the specific audience’s experiences. In this way people are able to easily understand new radical ideas because they are allowed to create a strong mind connection between what they already know and what they do not. However, this is not enough. This approach needs to be matched with another very critical issue when conveying new ideas: the need of simplicity. 

Analogies, metaphors as well as the concepts themselves must be almost instantaneous in order to be properly and completely understood. The only way to achieve this result is by breaking the concept down into different parts. To explain this last sentence I would use an analogy. Guiding people out of their categories has to be a process very similar to the climbing of a ladder: it is a matter of “step by step”. 

Once again the biblical example is a lucid way to understand the “step by step” through which an effective innovator lead people out of their categories. In fact, Jesus’ Parables do not force the audience immediately in the beginning. Instead, they start as ordinary stories, telling usual facts, in order to make people listening comfortable. Only after that, when the audience is in this  kind of “comfort-zone”, the degree of newness becomes to be prevalent, until it reaches the climax in the end, when the new radical message is conveyed. In this regard, the Parable of the Prodigal son is probably the best in showing how a radical new concept needs to be broken down and administered to the audience gradually. 

In conclusion, we could think about everything said above on a larger scale and apply it to society in general. Nothing would change, because society is a group of people sharing the same values and norms, but still it remains a group of people. In other words, a larger audience than the one attending a business presentation. The necessary condition to be an agent of change in every context is always the one that harmoniously matches innovation and communication skills and attitudes. Only in this way the communication process minimizes the likelihood of misunderstanding and reaches its maximum degree of effectiveness, generating the impact hoped. 

As always I would like to leave you with an inspiring quote:

“Electric communication will never be a substitute for the face of someone who with their soul encourages another person to be brave and true.” - Charles Dickens - 





I really want to point out that every reference on the figure of Jesus is something that in this context has nothing to do with religion; it is just about an insight about Jesus, the historical man, as an innovator and master communicator.

- Michele Bellini -