The Fantastic Five: Simplifying Innovation to Revolutionize Your Organization

Turn Complex Challenges into Actionable Strategies

Building an innovation system can feel like staring up at Everest. You know it’s worth the climb, but the sheer scale of it all can be paralyzing. If your organization has been focused on optimizing and perfecting the known, the idea of shifting gears to an innovation-first approach might feel like the kind of decision that requires a massive investment, endless resources, and a mountain of processes.

But what if I told you that it doesn’t have to be that way? What if you could simplify innovation down to just five core components that could transform your organization’s approach and set you on a path to sustained success?

Let us introduce you to the Fantastic Five—five strategic components that can take your organization from chaos to clarity, from confusion to confident action.

1. The Power of Portfolio Management

Imagine your innovation efforts as a financial portfolio. You wouldn’t bet everything on a single stock and cross your fingers, right? Instead, you diversify, assess risks, and align your investments with your goals. The same principle applies to innovation.

Take one of our aerospace clients, for example. They had 285 live innovation projects—sounds impressive, but when we asked them what value these projects would deliver, they didn’t have a clear answer. They were spreading their resources too thin, investing everywhere without a clear focus.

We stepped in and helped them organize their efforts into four clear categories: Optimize, Grow, Renew, and Maximize. With this structure, their strategy finally snapped into focus. They could see which projects were improving current operations, which were exploring new markets, and which were rethinking their entire approach. This clarity allowed them to make smarter decisions about where to put their resources, ensuring that every innovation dollar was working toward a meaningful goal.

2. Development Process: Turning Ideas into Impact

Once you’ve got your portfolios in order, the next step is to ensure that your ideas have a clear path from concept to reality. This is where a defined development process—what we call the Next Cycle—comes into play. It’s like having a roadmap that guides your teams from the spark of an idea all the way through to implementation, using small bets.

Without this, you risk falling into the trap of endless brainstorming sessions that go nowhere. Innovation needs structure just as much as it needs creativity. It’s about creating a disciplined process that encourages experimentation while keeping everyone aligned on the end goal.

3. Decision-Making Criteria: Setting the Rules of the Game

Imagine playing a game where no one knows the rules. It would be chaos, right? The same goes for innovation. Everyone in your organization—from the top executives to the frontline innovators—needs to understand what criteria determine success. This alignment not only streamlines the decision-making process but also empowers teams to work more effectively.

We call this the Super Seven—a set of questions that should be asked of every innovation opportunity. If the answer to any question is "no," you have a choice: stop, pause, or rework until you get a "yes." It’s about creating a system where progress is made because the right questions are being asked, not because someone sold an idea well.

4. Operating Principles: Defining How Innovation Works

Operating principles are the unspoken rules that guide how things get done in your organization. In the context of innovation, these principles are what set the Next system apart from the Now system.

Consider this: in a traditional setup, acquiring a new piece of equipment might require a lengthy procurement process. But in the innovation world, speed is key. You need the freedom to move quickly, to test and iterate without getting bogged down by red tape. Operating principles define these new rules of engagement, ensuring that innovation teams can operate with the agility they need to succeed.

5. Next Funding: Fueling Innovation with the Right Resources

Finally, let’s talk about money. The traditional annual budget process doesn’t cut it when it comes to funding innovation. Innovation is unpredictable by nature—you don’t always know what the problem is, let alone the solution. That’s why Next funding requires a different approach.

One of the biggest mistakes we’ve seen is organizations blowing their entire budget on a single idea before they’ve even tested it. Think Quibi—a startup that attracted $1.5 billion in venture capital but failed because they didn’t have a development process to validate their ideas. They spent all their money at once and had nothing left when things didn’t pan out.

The lesson here is simple: don’t put all your eggs in one basket. Structure your funding to allow for small bets, constant learning, and iteration. This way, you’re not just throwing money at innovation—you’re investing in it wisely.

Conclusion

Innovation doesn’t have to be overwhelming. By focusing on these Fantastic Five components—portfolio management, the Next cycle, decision-making criteria, operating principles, and Next funding—you can simplify the process and turn complex challenges into actionable strategies. Start small, focus on what matters, and watch as your organization transforms into a capital-building powerhouse.

So, are you ready to take the first step? Remember, you don’t have to understand everything before you start doing something. Begin with these five components and let the rest follow. It’s time to simplify innovation and make the next happen.